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Published on 11/5/2010 in the Prospect News Investment Grade Daily and Prospect News Liability Management Daily.

ProLogis begins tender offer on six note series, another on eight more

By Susanna Moon

Chicago, Nov. 5 - ProLogis said it began two cash tender offers for 14 series of its notes.

In the first offer, the company will purchase any and all of six series of notes, with the payout fixed for three series and to be priced at a later date for the other three series.

For each $1,000 principal amount, the company will pay the following amount:

• $1,100.00 for the $80 million 7.81% notes due Feb. 1, 2015;

• $1,192.50 for the $27 million 9.34% notes due March 1, 2015; and

• $1,170.00 for the $45 million 8.65% notes due May 15, 2016.

For each $1,000 principal amount, pricing for the remaining note series will be set using the bid-side price of a U.S. Treasury note plus a spread at 2 p.m. ET on Nov. 15 as follows:

• $387.93 million 5.625% notes due Nov. 15, 2015 based on the 1.25% Treasury note due Oct. 31, 2015 plus 250 basis points;

• $378,531,000 5.75% notes due April 1, 2016 based on the 1.25% Treasury note due Oct. 31, 2015 plus 255 bps; and

• $550 million 5.625% notes due Nov. 15, 2016 based on the 1.25% Treasury note due Oct. 31, 2015 plus 260 bps

The company will pay accrued interest to but not including the settlement date.

The offer will end at 5 p.m. ET on Nov. 15.

Capped offer

In the second offer, ProLogis will purchase the maximum amount of notes it can get for $1.4 billion minus what it bought in the first offer.

If the company purchases $1.4 billion or more notes in the first offer, the second offer will be terminated.

For each $1,000 principal amount, pricing for the notes will be set using the bid-side price of a U.S. Treasury note at 2 p.m. ET on Nov. 19, listed in order of priority acceptance level, as follows:

• $600 million 7.375% notes due Oct. 30, 2019 based on the 2.625% Treasury note due Aug. 15, 2020 plus 260 bps;

• $800 million 6.875% notes due March 15, 2020 based on the 2.625% Treasury note due Aug. 15, 2020 plus 255 bps;

• $350 million 7.625% notes due Aug. 15, 2014 based on the 1.25% Treasury note due Oct. 31, 2015 plus 185 bps;

• $600 million 6.625% notes due May 15, 2018 based on the 2.625% Treasury note due Aug. 15, 2020 plus 230 bps;

• $100 million 7.625% notes due July 1, 2017 based on the 2.625% Treasury note due Aug. 15, 2020 plus 190 bps;

• $300 million 6.25% notes due March 15, 2017 based on the 2.625% Treasury note due Aug. 15, 2020 plus 185 bps;

• $61,443,000 5.5% notes due March 1, 2013 based on the 0.5% Treasury note due Oct. 15, 2013 plus 215 bps;

• $58,935,000 5.5% notes due April 1, 2012 based on the 0.375% Treasury note due Oct. 31, 2012 plus 215 bps;

Holders will receive a premium of $30 per note for notes tendered by the early tender date.

The company will pay accrued interest to but not including the settlement date.

The second offer will run until 11:59 p.m. ET on Dec. 6.

The dealer managers for the tender offers are Deutsche Bank Securities Inc. (866 627-0391 or collect 212 250-2955), RBC Capital Markets, LLC (877 381-2099 and collect 212 618-7822) and RBS Securities Inc. (877 297-9832 and collect 203 897-6145).

The information agent is Global Bondholder Services Corp. (866 470-4200 or collect 212 430-3774).

ProLogis is a Denver-based provider of distribution facilities.


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