S&P cuts ProLogis; notes BBB- and preferreds BB

Standard & Poor's said it lowered the corporate credit rating on ProLogis Inc. and ProLogis LP to BBB- from BBB.

The outlook is stable.

S&P lowered the issue-level rating on the company's senior notes to BBB- from BBB and preferred securities to BB from BB+. S&P removed all ratings on the company from CreditWatch, where they were placed with negative implications on Jan. 28.

S&P assigned a BBB- rating to new senior notes issued by ProLogis LP through an exchange offer for senior notes originally issued by legacy ProLogis. S&P also assigned a BB rating to three series of preferred stock issued by ProLogis Inc. in exchange for preferred securities originally issued by legacy ProLogis.

The downgrade reflects the view that certain credit metrics will remain weak but adequate for the BBB- rating, the agency said.

The ratings acknowledge that initially weak credit metrics and potential integration risk given the size of the merger are somewhat mitigated by the company's adequate liquidity, well-laddered debt maturities, good access to capital and the strategic benefits of the combination, the agency added.

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