8-KMaterial AgreementsFinancial EventsExhibits & Filings

Prologis, Inc. 8-K Report, Material Agreement (Jun 29, 2006)

Filed June 29, 2006For Securities:PLDPLDGP

Summary

This 8-K filing by AMB Property Corporation (now Prologis, Inc.) details a significant amendment and restatement of its Japanese yen-denominated unsecured revolving credit facility. The facility was increased to JPY 45 billion (approximately US$386 million) from JPY 35 billion (approximately US$300 million). This provides the company with enhanced financial flexibility to fund property acquisitions and development projects in Japan. Key changes to the credit agreement include modifications to covenants. While some financial ratio requirements were adjusted or eliminated (such as the ratio of outstanding unsecured debt to unencumbered asset value, and the removal of limitations on foreign property as a percentage of total asset value), new aggregate limitations were introduced for certain permitted holdings like unimproved assets. These amendments reflect a strategic shift in how the company manages its balance sheet and financial obligations related to its international operations, offering potential for growth and increased investment capacity.

Key Highlights

  • 1Increased Japanese yen unsecured revolving credit facility to JPY 45 billion (approx. US$386 million) from JPY 35 billion (approx. US$300 million).
  • 2The facility is amended and restated, providing enhanced financial flexibility.
  • 3Proceeds are designated for acquisition and development of properties in Japan.
  • 4Key covenants were amended, including adjustments to debt-to-asset value ratios and secured debt ratios.
  • 5Certain financial ratios were eliminated, such as the ratio of outstanding unsecured debt to unencumbered asset value.
  • 6Limitations on foreign property as a percentage of total asset value were removed.
  • 7New aggregate limitation of 25% of total asset value for permitted holdings (unimproved assets, taxable REIT subsidiaries, investment mortgages) was introduced.

Frequently Asked Questions

The amended and restated revolving credit agreement increases the company's borrowing capacity in Japanese Yen and provides enhanced flexibility to fund the acquisition and development of properties in Japan, as well as for other real estate-related purposes.

The new facility is for JPY 45 billion (approximately US$386 million), an increase from the previous JPY 35 billion (approximately US$300 million). It also includes several amendments to covenants and default provisions.

Some key changes include amendments to the ratios of total debt to total asset value, secured debt to total asset value, and unencumbered net operating cash flow to unsecured debt service. The ratio of outstanding unsecured debt to unencumbered asset value was eliminated, and the limitation on foreign property as a percent of total asset value was removed. A new aggregate limitation of 25% of total asset value was placed on certain permitted holdings.

The agreement involves AMB Japan Finance Y.K. and other qualified Japanese subsidiaries as borrowers, with AMB Property, L.P. and AMB Property Corporation acting as guarantors. Sumitomo Mitsui Banking Corporation is the administrative agent, sole lead arranger, and bookmanager, along with a syndicate of other banks.