Logistic Properties of the Americas Announces $120 million Refinancing of Two Logistics Parks in Costa Rica and Peru

Rhea-AI Summary

Logistic Properties of the Americas (NYSE American: LPA) announced the refinancing of $120 million in mortgage loans for its La Verbena Logistics Park in Costa Rica and Lima Sur Logistics Park in Peru. LPA secured a new $60 million, 15-year loan from Banco BAC San José for La Verbena, replacing a previous $48.05 million loan. The new loan features a three-month SOFR plus 2.00% interest rate and a 20-year amortization profile. Additionally, LPA obtained a $60 million, 10-year sustainability-linked loan from Banco BBVA Peru for Lima Sur Logistics Park, which includes two tranches with interest rates of 8.40% and 8.50%. This move aims to lower financing costs, extend debt maturity, and support reinvestment and development within its property platform.

Positive

• Refinanced $120 million in mortgage loans, improving liquidity and financial flexibility.
• New $60 million, 15-year loan for La Verbena Logistics Park at a lower interest rate of three-month SOFR plus 2.00%.
• New $60 million, 10-year sustainability-linked loan for Lima Sur Logistics Park with discounted interest rates of 8.40% and 8.50%.
• Extended debt maturity profiles, enhancing long-term financial stability.
• Surplus proceeds from refinancing will be reinvested in property development and expansion.

Negative

• New loan for Lima Sur includes a 35% balloon payment due at maturity, which may pose future financial challenges.
• Interest rates for the Lima Sur loan are relatively high at 8.40% and 8.50%, even with sustainability discounts.
• Refinancing involves replacing a $48.05 million loan with a new $60 million loan, potentially increasing debt burden.

Insights

Financial Analyst

LPA’s refinancing actions are strategic moves aimed at enhancing their financial position and optimizing their capital structure. The La Verbena Logistics Park refinancing involves a $60 million mortgage with Banco BAC San José, replacing the previous $48.05 million loan. The new loan offers a lower interest rate of SOFR + 2.00% compared to SOFR + 3.78% earlier. This reduction in interest rate will significantly decrease financing costs, contributing positively to LPA's net income over time. Additionally, the extension from a 10-year to a 15-year term provides better debt maturity management, reinforcing LPA’s liquidity position.

The refinancing for the Lima Sur Logistics Park involves a $60 million loan with Banco BBVA Peru that is divided into two tranches. Tranche A, at a fixed rate of 8.4% and Tranche B, at 8.5%, with potential reductions contingent on sustainability benchmarks, indicate LPA’s commitment to sustainability. The refinancing replaces a $44 million loan from IFC, reducing the interest burden and extending the repayment term. These moves not only cut down on interest expenses but also indicate confidence in the ability to meet sustainability targets and capitalize on the associated financial benefits.

For retail investors, these refinancings suggest prudent financial management that could lead to improved earnings and cash flow stability. The strategic reinvestment of remaining funds into property expansions signals growth potential, making this a positive development for stakeholders in both the short-term and long-term perspectives.

Market Research Analyst

The refinancing deals in Costa Rica and Peru showcase LPA's adeptness at leveraging local financial institutions to support its growth strategy. The lower interest rates and extended amortization periods are not just financial maneuvers but reflect LPA's strong market positioning and relationships with banks in these regions. The move to sustainability-linked loans, particularly in Peru, highlights an alignment with global ESG trends (Environmental, Social, Governance), which are becoming increasingly relevant to investors.

Participating in sustainability-linked financing indicates LPA's readiness to comply with evolving regulatory and market expectations. This could attract ESG-conscious investors, potentially raising LPA’s profile and market value. The intent to reinvest in existing and new properties further solidifies LPA's commitment to expanding its footprint in attractive markets.

Retail investors should note the potential for capital appreciation and enhanced market reputation of LPA, thanks to these strategic financial moves. The focus on sustainability and financial flexibility could offer a competitive edge, positioning LPA favorably in the industrial real estate market of Central and South America.

SAN JOSE, Costa Rica--(BUSINESS WIRE)-- Logistic Properties of the Americas (NYSE American: LPA) (together with its subsidiaries, “LPA” or the “Company”), a leading developer, owner, and manager of institutional quality, Class A industrial and logistics real estate in Central and South America, today announced the refinancing of $120 million of its mortgage loans related to the Company’s La Verbena Logistics Park in Costa Rica and Lima Sur Logistics Park in Peru.

Paul Smith, LPA’s Chief Financial Officer, said: “As part of our financial strategy we refinanced LPA’s La Verbena and Lima Sur logistics parks, in order to decrease our financing costs and extend our debt maturity profile. Through proactive liability management, we endeavor to maintain our financial flexibility and strengthen our balance sheet to further invest in meeting growing demand from top-tier companies for premium real estate properties in LPA’s current and target markets.”

LPA entered into a new $60 million 15-year mortgage loan for the La Verbena Logistics Park with Banco BAC San José, S.A. (“BAC”). The new loan bears interest at a rate of three-month SOFR plus 2.00% (with a floor of 5.5%) and has a 20-year amortization profile. The proceeds from this loan were used to repay the previous $48.05 million 10-year mortgage loan with BAC, which had an interest rate of three-month SOFR plus 3.78% and a 15-year amortization profile. The Company intends to use the remainder of the proceeds from this loan to reinvest in other properties within its platform as well as to develop new properties.

Additionally, LPA entered into a new $60 million, 10-year mortgage loan for the Lima Sur Logistics Park with Banco BBVA Peru. The new sustainability-linked loan has two tranches and a 35% balloon payment due at maturity. The Tranche A loan is for an amount of $48.7 million and bears a fixed interest rate of 8.40%. The Tranche B loan is for an amount of $11.3 million and bears a fixed interest rate of 8.50%. The interest rates of both tranches are set at a 20-basis point discount, assuming the Company meets certain sustainability benchmarks on a timely basis. The proceeds of Tranche A were used to repay the balance of a $44 million loan provided by the International Finance Corporation (“IFC”). LPA intends to use the proceeds of Tranche B for reinvestment in and expansion of its property platform.

About Logistic Properties of the Americas 
Logistic Properties of the Americas is a leading developer, owner, and manager of institutional quality, Class A industrial and logistics real estate in Central and South America. LPA’s customers are multinational and regional e-commerce retailers, third-party logistic operators, business-to-business distributors, and retail distribution companies. LPA’s strong customer relationships and insight is expected to enable future growth through the development and acquisition of high-quality, strategically located facilities in its target markets. As of December 31, 2023, LPA consisted of an operating and development portfolio of thirty-four logistic facilities in Colombia, Peru and Costa Rica totaling more than 491,000 square meters (or approximately 5.3 million square feet) of gross leasable area.

Forward-Looking Statements

This press release contains certain forward-looking information, which may not be included in future public filings or investor guidance. The inclusion of forward-looking information in this press release should not be construed as a commitment by LPA to provide guidance on such information in the future. Certain statements in this press release may be considered forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements include, without limitation, statements about future events or LPA's future financial or operating performance. These forward-looking statements regarding future events and the future results of LPA are based on current expectations, estimates, forecasts, and projections about the industry in which LPA operates, as well as the beliefs and assumptions of LPA’s management. These forward-looking statements are only predictions and are subject to known and unknown risks, uncertainties, assumptions and other factors beyond LPA's control that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. They are neither statements of historical fact nor promises or guarantees of future performance. Therefore, LPA's actual results may differ materially and adversely from those expressed or implied in any forward-looking statements and LPA therefore caution against relying on any of these forward-looking statements.

These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by LPA and its management, are inherently uncertain and are inherently subject to risks variability and contingencies, many of which are beyond LPA’s control. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (i) the possibility of any economic slowdown or downturn in real estate asset values or leasing activity or in the geographic markets where LPA operates; (ii) LPA’s ability to manage growth; (iii) LPA’s ability to continue to comply with applicable listing standards of NYSE American; (iv) changes in applicable laws, regulations, political and economic developments; (v) the possibility that LPA may be adversely affected by other economic, business and/or competitive factors; (vi) LPA’s estimates of expenses and profitability; (vii) the outcome of any legal proceedings that may be instituted against LPA and (viii) other risks and uncertainties set forth in the filings by LPA with the U.S. Securities and Exchange Commission. There may be additional risks that LPA does not presently know or that LPA currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Any forward-looking statements made by or on behalf of LPA speak only as of the date they are made. Except as otherwise required by applicable law, LPA disclaims any obligation to publicly update or revise any forward-looking statements to reflect any changes in their respective expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Accordingly, you should not place undue reliance on forward-looking statements due to their inherent uncertainty.

Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240516012049/en/

Media Relations:

Zach Kouwe / Kendal Till

Dukas Linden Public Relations

+1 646-722-6533

LLP@dlpr.com

Investor Relations:

Jennifer Carranza

Logistic Properties of the Americas

+506 2204-7020

ir@lpamericas.com

Barbara Cano

InspIR Group

+1 917 861-2530

barbara@inspirgroup.com

Source: Logistic Properties of the Americas

FAQ

What is the impact of LPA's $120 million refinancing?

LPA's $120 million refinancing is aimed at reducing financing costs, extending debt maturity, and reinvesting in property development.

What are the details of the new loan for La Verbena Logistics Park?

LPA secured a $60 million, 15-year loan from Banco BAC San José with an interest rate of three-month SOFR plus 2.00%.

What are the terms for the Lima Sur Logistics Park loan?

The Lima Sur loan is a $60 million, 10-year sustainability-linked loan with two tranches at interest rates of 8.40% and 8.50%.

How will LPA use the proceeds from the new loans?

LPA plans to use the proceeds to repay existing loans and reinvest in property development and expansion.

What are the financial benefits of LPA's new loans?

The new loans lower financing costs, extend debt maturity profiles, and provide funds for reinvestment in premium real estate properties.

What potential risks are associated with LPA's new loans?

Potential risks include high interest rates for the Lima Sur loan and a 35% balloon payment due at maturity.