ProLogis Lines Up Over $200M in Financing

ProLogis isn’t wasting time. In a presentation to investors on Nov. 13, new CEO Walter Rakowich gave some specifics about how the company, the world’s largest developer/owner of distribution facilities, would respond to a financial crisis that included a stock price in freefall and the resignation of the previous CEO, Jeffrey Schwartz. The three-pronged strategy that Rakowich presented comprises deleveraging ProLogis’ balance sheet, minimizing risk in its business model and downsizing. In line with that strategy, ProLogis has just closed a $104.7 million secured financing with a large institutional investor on behalf of an affiliate of ProLogis North American Industrial Fund II. The 10-year financing has a coupon of 6.38 percent and represents a loan-to-value of approximately 58 percent on five industrial properties in the U.S. The proceeds will be used to refinance a $62 million secured debt facility that was set to mature in January 2009 and to pay down $42 million of a Citi bridge debt facility. In all, the financing will reduce 2009 maturities in the fund by about $104 million. And in a transaction announced on Monday, ProLogis closed on a $105.8 million financing with a syndicate of four banks: Bank of America, RBOS/ABN AMRO, Sumitomo Mitsui and Bank of China. The pricing is 110 percent of the applicable PBOC base rate, and the facility will have a maturity date of Nov. 28, 2011. Bank of America Securities was the sole lead arranger on the refinancing. The credit facility has two components, a $36.4 million term loan and a $69.4 million revolver. Proceeds will be used to refinance the $105.6 million tranche of ProLogis’ global line of credit, which was scheduled for maturity in May 2009, and for general corporate purposes.