Summary
Prologis, Inc. (PLD) filed an 8-K on August 22, 2016, to report on a material definitive agreement and the creation of a direct financial obligation. The company, through its Japanese subsidiary Prologis GK Holdings Y.K., entered into a JPY 120,000,000,000 (approximately $1.17 billion USD at the time) Term Loan Agreement with various lenders, coordinated by Sumitomo Mitsui Banking Corporation (SMBC). This new facility, comprised of two tranches maturing in 2022 and 2023, can be expanded up to JPY 200,000,000,000. The primary purpose of this new loan is to refinance existing short-term and medium-term debt obligations denominated in Japanese Yen. The new Yen Term Loan features pricing tied to Prologis' public debt ratings, offering flexibility. The agreement includes standard covenants and defaults, with a significant cross-acceleration clause. Importantly, both Prologis, Inc. and its operating partnership, Prologis, L.P., are providing unconditional guarantees for the loan. This refinancing activity demonstrates Prologis' proactive management of its debt structure, aiming to optimize its interest expense and maturity profile, particularly in the Japanese market.
Key Highlights
- 1Prologis entered into a JPY 120 billion Term Loan Agreement through its Japanese subsidiary.
- 2The loan is guaranteed by both Prologis, Inc. and Prologis, L.P.
- 3The facility has two tranches maturing in August 2022 (JPY 50 billion) and August 2023 (JPY 70 billion).
- 4The total facility can be expanded to JPY 200 billion.
- 5Proceeds from the new loan will be used to refinance existing Yen-denominated term loans.
- 6Loan pricing is variable, based on Prologis' public debt ratings.
- 7The agreement includes customary covenants, representations, and default provisions, including a cross-acceleration clause.