8-KFinancial EventsExhibits & Filings

Prologis, Inc. 8-K Report, Financial Obligation (Dec 1, 2004)

Filed December 1, 2004For Securities:PLDPLDGP

Summary

Prologis, Inc. (PLD), through its Japanese subsidiary AMB Tokai TMK, has entered into a significant secured project financing agreement totaling up to approximately $195 million USD (¥20,000,000,000 JPY). This financing, arranged by Sumitomo Mitsui Banking Corporation (SMBC), is intended to fund the development of the Ohta distribution center in Tokyo and to repay existing debt. Investors should note that Prologis, Inc. and its parent AMB Property, L.P. have jointly and severally guaranteed AMB Tokai TMK's obligations under this new financing. The financing matures in October 2006, with a potential one-year extension, and includes provisions for interest rate swaps to fix a portion of the interest expense. The filing also outlines a potential bond issuance of ¥10-15 billion JPY, also arranged by SMBC, which could be used to repay the project financing, with certain recourse obligations for AMB Property, L.P. if specific leasing criteria are not met.

Key Highlights

  • 1Prologis' Japanese subsidiary, AMB Tokai TMK, secured a project financing of up to ¥20 billion JPY (approx. $195 million USD).
  • 2The financing is secured by real property in Tokai, Tokyo, and a planned distribution center (Ohta distribution center).
  • 3Prologis, Inc. and AMB Property, L.P. are jointly and severally guarantors for the subsidiary's obligations.
  • 4Proceeds will be used for construction costs of the Ohta distribution center and to repay existing debt.
  • 5The financing matures on October 31, 2006, with a one-year extension option.
  • 6An interest rate swap has been put in place to fix the rate on ¥13 billion JPY of the debt.
  • 7A commitment letter exists for a potential ¥10-15 billion JPY bond issuance by AMB Tokai TMK to potentially refinance the project loan.

Frequently Asked Questions

The primary purpose is to fund the construction costs associated with the Ohta distribution center in Tokyo, Japan, and to pay down existing borrowings under a separate credit facility.

Prologis, Inc. and its parent, AMB Property, L.P., have jointly and severally guaranteed the obligations of their subsidiary, AMB Tokai TMK, under this financing agreement. This means they are fully responsible for the debt if the subsidiary defaults.

Yes, AMB Tokai TMK has entered into an interest rate swap with Sumitomo Mitsui Banking Corporation (SMBC) to fix the interest rate payable on a principal amount of ¥13,000,000,000 at 1.32% per annum plus the applicable margin.

The filing mentions a commitment letter for a potential issuance of bonds by AMB Tokai TMK, ranging from ¥10 billion to ¥15 billion JPY. These bonds would be secured by the Ohta property and could be used to repay the project financing.