Summary
Prologis, Inc. (formerly AMB Property Corporation) filed this 8-K report on November 30, 2005, to disclose the termination of a material definitive agreement. Specifically, the company announced the cancellation of the remaining $53.9 million in senior unsecured notes held by Teachers Insurance and Annuity Association of America (TIAA). This action was taken in accordance with a provision in the original Note Purchase Agreement dated November 5, 2003. This termination effectively converts the unsecured debt into a secured first mortgage loan. AMB Property, L.P. (the sole general partner of which Prologis is the general partner) required TIAA to return the notes for cancellation and, in exchange, TIAA issued a new first mortgage loan of equal principal amount, secured by properties within one of Prologis's co-investment joint ventures. This move represents a refinancing of a portion of the company's debt, shifting it from unsecured to secured status and likely impacting the company's leverage and borrowing costs.
Key Highlights
- 1Termination of $53.9 million in senior unsecured notes held by Teachers Insurance and Annuity Association of America (TIAA).
- 2The termination was executed on November 30, 2005, according to a provision in a November 5, 2003 Note Purchase Agreement.
- 3The unsecured notes were replaced by a $53.9 million first mortgage loan issued by TIAA.
- 4The new mortgage loan is secured by properties held in one of Prologis's co-investment joint ventures.
- 5This transaction represents a refinancing, converting unsecured debt to secured debt.
- 6The filing also notes a prior conversion of $21.1 million of these notes on December 9, 2004, into a secured loan.