), through its operating subsidiary Prologis, L.P., priced a
public offering of two series of senior unsecured notes worth
$1.25 billion of the aggregate principal amount. The
move is in line with the company's strategy to enhance its
financial position. The sale of the notes is anticipated to close
on Aug 15, subject to customary closing conditions.
In particular, the operating subsidiary of this industrial
real estate investment trust (REIT) intends to utilize the net
proceeds from the offering to pay off debts under the global
credit line. It also plans to use the proceeds to finance cash
purchases of certain senior notes that started on Aug 8,
In the $1.25 billion of aggregate principal amount of
notes, the two series of notes are of $400 million and $850
million. The 2.75% notes worth $400 million (due Feb 15, 2019)
are priced at 99.965% of the principal amount. On the other hand,
the 4.25% notes worth $850 million (due Aug 15, 2023) are priced
at 99.742% of the principal amount. As a matter of fact, the
notes will be fully and unconditionally guaranteed by
Off late, Prologis has been active in enhancing its balance
sheet position. Last month, the company recast and increased its
global line of credit. The credit line was upsized by $350
million to $2.0 billion and the move helped extend the initial
term to 2017 as well as lower its interest rate by 40 basis
In July, Prologis delivered a positive earnings surprise of
about 7.9% for the second quarter of 2013. The company reported
core funds from operations (FFO) per share of 41 cents, beating
the Zacks Consensus Estimate of 38 cents. However, it fell short
of the prior-year quarter figure by 2 cents.
Results primarily reflected a decent reduction in expenses,
partly offset by a fall in revenues. Yet, the company's strategic
measures and capital market moves have helped enhance
flexibility, lower interest expenses and extend maturities.
Prologis currently carries a Zacks Rank #3 (Hold). Some better
performing REITs include
Highwoods Properties, Inc.
Extra Space Storage Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of
REITs, is obtained after adding depreciation and amortization
and other non-cash expenses to net income.
CUBESMART (CUBE): Free Stock Analysis Report
EXTRA SPACE STG (EXR): Free Stock Analysis
HIGHWOODS PPTYS (HIW): Free Stock Analysis
PROLOGIS INC (PLD): Free Stock Analysis
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