ProLogis Closes Japanese Financing - Analyst Blog

ProLogis (PLD), one of the leading global providers of distribution facilities, has recently obtained $122 million (11.5 billion yen) of secured financing to repay its debt. The financing was obtained through two "tokutei mokuteki kaisha" (TMK) bonds, a tax-favored, special-purpose vehicle created in Japan for acquiring and holding Japanese assets. Secured by real estate assets, the TMK issues corporate bonds, which can be bought by Japanese and non-Japanese investors.  

 

The first bond has a maturity period of three years and is collateralized by ProLogis Parc Ichikawa II, a distribution facility spanning 802,000 square feet of space in Tokyo, Japan. The second bond has a maturity period of five years and is collateralized by ProLogis Parc Maishima III, a distribution facility spanning 803,000 square feet of space in Osaka, Japan. Proceeds from the financing were used to pay down the global lines of credit.

 

ProLogis owns and manages interests in over 2,500 distribution facilities spanning 475 million square feet (including properties under development) of space. The company leases its industrial facilities to over 4,400 customers, which include manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises with large-scale distribution needs.

 

In response to the economic realities of constrained credit and deteriorating industrial real estate fundamentals, ProLogis has stopped all new development starts and early-stage developments. The company is currently concentrating on increasing its liquidity and de-leveraging its balance sheet.