Key Takeaways
- • ProLogis closed two unsecured credit facilities for European fund subsidiaries: €50 million for ProLogis European Properties (PEPR) and €75 million for ProLogis European Properties Fund II (PEPF II), both with three-year maturities through 2013.
- • PEPR's facility includes a €100 million accordion expansion feature and pricing of 240 basis points over Euribor/Libor at current credit rating (range: 225–300 bps depending on rating); PEPF II's facility carries 250 basis points over Libor with potential reduction to 225 bps upon achieving private investment grade rating.
- • Facilities replace maturing debt obligations (PEPR's December 2010 facility and PEPF II's July 2010 maturity) and provide liquidity for working capital and opportunistic acquisition activity in the European distribution real estate market.
- • Syndicate of major international banks arranged the facilities: Deutsche Bank, Morgan Stanley, and Royal Bank of Scotland for PEPR; Bank of America, ING Real Estate Finance, and Royal Bank of Scotland for PEPF II, reflecting ongoing institutional support for ProLogis' European platform.
Summary
ProLogis, a leading global provider of distribution facilities, announced on August 16, 2010, that it has successfully closed two senior unsecured credit facilities on behalf of its European fund entities. The refinancing addresses immediate debt maturity schedules while positioning the funds for continued operational flexibility during a challenging credit environment.
The first facility, arranged for ProLogis European Properties (PEPR), totals €50 million with a three-year tenor maturing August 9, 2013. This facility replaces PEPR's existing unsecured credit line due in December 2010. The transaction was jointly arranged by Deutsche Bank AG, Morgan Stanley Senior Funding Inc., and The Royal Bank of Scotland N.V. The facility includes a €100 million accordion expansion feature, allowing PEPR to increase borrowing capacity subject to securing additional lender commitments. Pricing is set at 240 basis points over applicable Euribor or Libor based on PEPR's current credit rating, within a range of 225 to 300 basis points determined by rating movements.
The second facility, established for ProLogis European Properties Fund II (PEPF II), amounts to €75 million over the same three-year period and replaces debt that matured July 30, 2010. Bank of America, N.A., ING Real Estate Finance N.V., and The Royal Bank of Scotland N.V. jointly arranged this facility. PEPF II's facility also includes a €75 million accordion feature and carries pricing of 250 basis points over Libor, with potential step-down to 225 basis points conditional on achieving a private investment grade rating.
According to company commentary, these facilities provide additional liquidity to address working capital needs and support opportunistic investments within the funds. The refinancing reflects ProLogis' ability to access capital markets through major institutional lenders despite broader credit market constraints present in mid-2010, positioning the European subsidiaries to maintain operational stability and pursue strategic acquisition opportunities in the logistics real estate sector.
The first facility, arranged for ProLogis European Properties (PEPR), totals €50 million with a three-year tenor maturing August 9, 2013. This facility replaces PEPR's existing unsecured credit line due in December 2010. The transaction was jointly arranged by Deutsche Bank AG, Morgan Stanley Senior Funding Inc., and The Royal Bank of Scotland N.V. The facility includes a €100 million accordion expansion feature, allowing PEPR to increase borrowing capacity subject to securing additional lender commitments. Pricing is set at 240 basis points over applicable Euribor or Libor based on PEPR's current credit rating, within a range of 225 to 300 basis points determined by rating movements.
The second facility, established for ProLogis European Properties Fund II (PEPF II), amounts to €75 million over the same three-year period and replaces debt that matured July 30, 2010. Bank of America, N.A., ING Real Estate Finance N.V., and The Royal Bank of Scotland N.V. jointly arranged this facility. PEPF II's facility also includes a €75 million accordion feature and carries pricing of 250 basis points over Libor, with potential step-down to 225 basis points conditional on achieving a private investment grade rating.
According to company commentary, these facilities provide additional liquidity to address working capital needs and support opportunistic investments within the funds. The refinancing reflects ProLogis' ability to access capital markets through major institutional lenders despite broader credit market constraints present in mid-2010, positioning the European subsidiaries to maintain operational stability and pursue strategic acquisition opportunities in the logistics real estate sector.
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