Summary: Lexington Realty Trust

Midsize REIT that invests in net-lease properties; Good geographic and tenant diversity; Long weighted average lease term; and Properties tend to be more special purpose than net lease peers. Improved balance sheet and leverage measures; Rising fixed-charge coverage (FCC); and "Adequate" liquidity. We base the positive outlook on Lexington Realty Trust on our expectation that weakness from the office segment will moderate in 2015. EBITDA will be lower but we expect the company to reduce debt in the intermediate term. We believe this will result in improved key credit measures. We also believe Lexington is attempting to improve the overall quality of the portfolio and reduce residual risk/specialized assets by transitioning to longer-term leases. We expect the company will operate

...Outlook: Positive We base the positive outlook on Lexington Realty Trust on our expectation that weakness from the office segment will moderate in 2015. EBITDA will be lower but we expect the company to reduce debt in the intermediate term. We believe this will result in improved key credit measures. We also believe Lexington is attempting to improve the overall quality of the portfolio and reduce residual risk/specialized assets by transitioning to longer-term leases. We expect the company will operate with debt to EBITDA of about 7.0x to 7.5x and FCC above 2.3x....

Summary