New Issue: Prologis prices $2.2 billion of fixed-rate notes in three tranches

By Cristal Cody

Tupelo, Miss., Feb. 3 – Prologis, LP priced a $2.2 billion three-part offering of fixed-rate notes (A3/A-) on Monday ahead of its merger with Liberty Property LP, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $500 million tranche of 2.125% seven-year notes priced at 99.833 to yield 2.15% and with a spread of 70 basis points over Treasuries.

Initial price talk was in the 95 bps spread area.

The company sold $1 billion of 2.25% 10-year notes at a Treasuries plus 80 bps spread, compared to initial talk in the 105 bps spread area. The issue priced at 99.331 to yield 2.324%.

In the final tranche, $700 million of 3% 30-year notes priced at 98.936 to yield 3.054%, or 105 bps over Treasuries.

The notes were initially talked to price with a 130 bps area spread.

J.P. Morgan Securities, LLC, SMBC Nikko Securities America, Inc., Wells Fargo Securities LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC and U.S. Bancorp Investments, Inc. were the bookrunners.

The 2027 and 2050 notes have mandatory calls if the company does not complete its merger with Liberty Property on or before Aug. 1, 2020 at 101%.

Proceeds will be used to fund the redemption of certain notes issued by Liberty Property as part of the acquisition, which is expected to close in February. If the merger is not completed, proceeds will be used for general corporate purposes.

Prologis announced in October 2019 plans to acquire Liberty in an all-stock transaction valued at about $12.6 billion, including the assumption of debt.

The logistics real estate company is based in San Francisco.

Issuer:	Prologis, LP
Guarantor:	Prologis, Inc.
Amount:	$2.2 billion
Description:	Notes
Bookrunners:	J.P. Morgan Securities, LLC, SMBC Nikko Securities America, Inc., Wells Fargo Securities LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC and U.S. Bancorp Investments, Inc.
Senior co-managers:	Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, MUFG and PNC Capital Markets LLC
Co-managers:	BBVA Securities Inc., Credit Agricole Securities (USA) Inc., Regions Securities LLC, SunTrust Robinson Humphrey, Inc., Academy Securities, Inc., BNY Mellon Capital Markets, LLC, NatWest Markets Securities Inc., Samuel A. Ramirez & Co., Inc. and Standard Chartered Bank
Trade date:	Feb. 3
Settlement date:	Feb. 18
Ratings:	Moody’s: A3
	S&P: A-
Distribution:	SEC registered
Seven-year notes
Amount:	$500 million
Maturity:	April 15, 2027
Coupon:	2.125%
Price:	99.833
Yield:	2.15%
Spread:	Treasuries plus 70 bps
Call features:	Make-whole call at Treasuries plus 15 bps before Feb. 15, 2027; thereafter at par; special mandatory call at 101% if merger with Liberty Property not completed on or before Aug. 1, 2020 at 101%
Price guidance:	Treasuries plus 75 bps area, plus or minus 5 bps; initial talk at Treasuries plus 95 bps area
10-year notes
Amount:	$1 billion
Maturity:	April 15, 2030
Coupon:	2.25%
Price:	99.331
Yield:	2.324%
Spread:	Treasuries plus 80 bps
Call features:	Make-whole call at Treasuries plus 15 bps before Jan. 15, 2030; thereafter at par
Price guidance:	Treasuries plus 85 bps area, plus or minus 5 bps; initial talk at Treasuries plus 105 bps area
30-year notes
Amount:	$700 million
Maturity:	April 15, 2050
Coupon:	3%
Price:	98.936
Yield:	3.054%
Spread:	Treasuries plus 105 bps
Call features:	Make-whole call at Treasuries plus 20 bps before Oct. 15, 2049; thereafter at par; special mandatory call at 101% if merger with Liberty Property not completed on or before Aug. 1, 2020 at 101%
Price guidance:	Treasuries plus 110 bps area, plus or minus 5 bps; initial talk at Treasuries plus 130 bps area

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