ProLogis Closes $121M in Financing for Japan Fund
- Dec 11, 2008
Industrial property REIT ProLogis has closed $121 million in financing on behalf of one of its Japan Properties Fund II. The financing is with two separate banks: The Sumitomo Mitsui Banking Corp. and The Chiba Bank Ltd., both in Japan. Prologis has had a tough go of things lately; as of September, the company has seen its stock price plummet, and recently ousted president Jeffrey Schwartz. The firm also announced a plan to take at least $2 billion of debt off of its balance sheets. The outline includes refinancing, renegotiations of debt maturities, in particular with property funds like the deal described above. The company is aiming to slow down with current developmental projects, stop beginning new developments, and save capital by making reductions in spending for general and administrative expenses, as well as by lowering the dividend to shareholders. The financing announced today with Sumitomo and Chiba banks is for a total of $121 million, the equivalent to 1.1 billion yen. The proceeds gained in the transactions are being used to refinance Tokutei Mokuteki Kaisha bonds that were originally intended to come due later this month. Tokutei Mokuteki Kaisha (TMK) is a tax-advantaged security that issues corporate bonds secured by real estate properties. Two months ago, the ProLogis Japan Property Fund II announced a $65 million acquisition of three buildings totaling 300,000 square feet located in Akishima City, about 50 kilometers from Tokyo’s Central Business District. And as of October, ProLogis’ Japan assets came to a total of 37.1 million square feet of industrial space owned, managed or under development with a list of clients that includes DHL, Nippon Express, Panasonic Logistics, Askul, Sanyo Electric Logistics, Seiyu/Wal-Mart, Yamato Logistics, FedEx and Nikon.