Industrial real estate investment trust (REIT) -
) - recast its JPY revolver to $458 million. The move enables the
company to enhance its capacity and lower its borrowing expenses.
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With a consortium of 9 banks, the credit facility has been
elevated by Prologis to JPY 45 billion ($458 million) from JPY
36.5 billion ($372 million). Moreover, as one of the features, it
may be further enhanced to JPY 56.5 billion ($576 million),
subject to the approval of the lender.
Based on Prologis' public debt ratings, the pricing on this
credit facility currently stands at LIBOR plus 130 basis points -
reflecting a reduction of 40 basis points from that of the prior
Yen facility. This credit facility is slated to mature on May 14,
Prologis is significantly capitalizing on promising opportunities
across the globe. With a larger customer base, rise in e-Commerce
application and supply chain consolidation, there is an
increasing demand for Class-A facilities and Prologis stands to
benefit as it has the capacity to offer modern distribution
facilities in strategic infill locations.
Moreover, the industrial property market in Japan is showing
signs of stability that was held back by the devastation and loss
caused by the earthquake and tsunami in early 2012. The strategic
move signifies Prologis' motive to capitalize on the opportunity
and meet the improving property values and growing institutional
demand for quality properties.
Particularly, amid an increase in Internet shopping, the demand
for warehouses is growing in Japan and Prologis is leveraging on
that. Its Japan REIT also began trading earlier this year.
Therefore, this recast of credit facility is encouraging for
Prologis, as in addition to lower interest expenses, the move
will provide the company the much required financial flexibility
to pursue its growth initiatives in Japan.
Prologis currently carries a Zacks Rank #3 (Hold). Some better
performing REITs include
Winthrop Realty Trust
), having a Zacks Rank #1 (Strong Buy) as well as
Extra Space Storage Inc.
), that carry a Zacks Rank #2 (Buy).