Prologis Completes $2.0 Billion of Financing Activity

Rhea-AI Summary

Prologis, Inc. (NYSE: PLD) announced the closing of approx. $2.0 billion in senior unsecured notes to fund a major refinancing initiative. The issuance includes €850 million (approx. $1.0 billion) due in 2032 at a 0.5% coupon, €500 million (approx. $600 million) due in 2041 at a 1.0% coupon, and $400 million due in 2031 at a 1.625% coupon. This transaction will reduce the company's average interest rate by 20 basis points to 1.8% and extend its average debt maturity to 10.6 years. Prologis aims to capitalize on favorable financing conditions to enhance its capital structure.

Positive

• Closing of $2.0 billion in senior unsecured notes enhances capital structure.
• Average interest rate reduction by 20 basis points to 1.8%.
• Extension of average debt maturity to 10.6 years.

Negative

• None.

SAN FRANCISCO, Feb. 22, 2021 /PRNewswire/ -- Prologis, Inc. (NYSE: PLD), the global leader in logistics real estate, today announced the closing of approximately $2.0 billion of senior unsecured notes. The financing included the issuance of:  

• €850 million (approximately $1.0 billion USD) of senior unsecured notes due in 2032 with a fixed annual coupon of 0.5%
• €500 million (approximately $600 million USD) of senior unsecured notes due in 2041 with a fixed annual coupon of 1.0%
• $400 million of senior unsecured notes due in 2031 with a fixed annual coupon of 1.625%

The blended coupon rate associated with the financings was approximately 0.9% with a weighted average term of more than 13 years. The proceeds will be used to redeem approximately $1.5 billion of senior notes called by Prologis, with the remainder to be used for general corporate purposes. The impact of both the issuances and the related redemptions were contemplated in the company's 2021 earnings guidance and will have the effect of reducing the company's weighted average interest rate by approximately 20 basis points to 1.8% and extend its weighted average remaining term by approximately 0.8 to 10.6 years.

"We continue to capitalize on our unique ability to source financing on a global basis that is accretive, while also reducing maturity risk and exposure to foreign currencies," said Tim Arndt, treasurer, Prologis. "We opportunistically extended the maturity of the redeemed notes by nearly 10 years while the reduced interest rates drove the transactions to be effectively neutral on a net present value basis."

ABOUT PROLOGIS
Prologis, Inc. is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. As of December 31, 2020, the company owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 984 million square feet (91 million square meters) in 19 countries. Prologis leases modern logistics facilities to a diverse base of approximately 5,500 customers principally across two major categories: business-to-business and retail/online fulfillment.

FORWARD-LOOKING STATEMENTS
The statements in this document that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate as well as management's beliefs and assumptions. Such statements involve uncertainties that could significantly impact our financial results. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," and "estimates," including variations of such words and similar expressions, are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to rent and occupancy growth, development activity, contribution and disposition activity, general conditions in the geographic areas where we operate, our debt, capital structure and financial position, our ability to form new co-investment ventures and the availability of capital in existing or new co-investment ventures — are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained and, therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) national, international, regional and local economic and political climates; (ii) changes in global financial markets, interest rates and foreign currency exchange rates; (iii) increased or unanticipated competition for our properties; (iv) risks associated with acquisitions, dispositions and development of properties; (v) maintenance of real estate investment trust status, tax structuring and changes in income tax laws and rates; (vi) availability of financing and capital, the levels of debt that we maintain and our credit ratings; (vii) risks related to our investments in our co-investment ventures, including our ability to establish new co-investment ventures; (viii) risks of doing business internationally, including currency risks; (ix) environmental uncertainties, including risks of natural disasters; (x) risks related to the current coronavirus pandemic; and (xi) those additional factors discussed in reports filed with the Securities and Exchange Commission by us under the heading "Risk Factors." We undertake no duty to update any forward-looking statements appearing in this document except as may be required by law.

 

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SOURCE Prologis, Inc.

FAQ

What financing activity did Prologis announce on February 22, 2021?

Prologis announced the closing of approximately $2.0 billion in senior unsecured notes.

How much will Prologis reduce its average interest rate after the financing?

The average interest rate will be reduced by 20 basis points to 1.8%.

What are the terms of the senior unsecured notes issued by Prologis?

Prologis issued €850 million due in 2032 at 0.5%, €500 million due in 2041 at 1.0%, and $400 million due in 2031 at 1.625%.

What will Prologis do with the proceeds from the senior unsecured notes?

Proceeds will be used to redeem approximately $1.5 billion of senior notes and for general corporate purposes.

What impact will the financing have on Prologis' debt maturity?

The financing will extend Prologis' average debt maturity by approximately 0.8 years to 10.6 years.