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DENVER-Locally based ProLogis, the world's largest industrial REIT, recently revealed in a Securities and Exchange Commission filing that it is offering $450 million in 5.5% notes due 2012, and $400 million in 5.75% notes due 2016. Interest on the notes will be paid semi-annually in appears on April 1 and Oct. 1 of each year, beginning this October. The 2012 notes will mature on April 1, 2012, and the 2016 notes will mature on April 1, 2016.
Although the total amount is $850 million, the net proceeds from the sale of the notes are expected to be approximately $838.7 million after deducting underwriting discounts and estimated offering expenses. ProLogis will use the net proceeds to repay a portion of the borrowings under a term loan that it entered into on Sept. 15, 2005, as well as funding for its global line of credit and general corporate purposes.
Underwriters for the latest series of notes include: Banc of America Securities, $102 million and $90.7 million, for the 2012 and 2016 notes respectively; Deutsche Bank Securities Inc., $102 million and $$90.7 million; J.P. Morgan Securities Inc, $102 million and $90.7 million; La Salle Financial Services Inc., $30 million, $26.7 million; CitiGroup Global Markets Inc., $30 million, $26.7 million; Calyon Securities (USA) Inc., $13.5 million, $12 million; and Daiwa Securities SMBC Europe Ltd., $13.5 million, $12 million.
As of March 17, ProLogis had approximately $390 million outstanding under the term loan, according to the SEC document. Amounts repaid under the term loan may not be re-borrowed. As of March 17, ProLogis had a total commitment of $2.6 billion under its global line of credit. This commitment was reduced by $27.8 million representing letters of credit outstanding with the lending banks.
In total, the REIT had approximately $2.18 billion outstanding and an available balance of approximately $376 million on March 17. Amounts repaid under the global line of credit may be re-borrowed and the company says it expects to make additional borrowings under the global line of credit following this offering for the development and acquisition of industrial distribution properties and for working capital purposes.
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