ProLogis repurchases $162.8 million convertibles notes at a discount

By Devika Patel

Knoxville, Tenn., April 7 - ProLogis announced it has repurchased $162.8 million of its convertible notes for $84.3 million, including interest.

The company bought back $21.7 million in 2.25% convertible senior notes due 2037 for $12 million and $141.1 million in 1.875% convertible senior notes due 2037 for $72.3 million.

The company also said that PLD International Finance LLC, a subsidiary, will purchase €42.65 million of its €350 million 4.375% notes due April 2011 for €32 million.

The company will pay €37,500 for each €50,000 of notes. In addition, it will pay interest on the notes up to, but not including, the payment date.

"Between our eurobond tender launched last week and the repurchase of convertible debt at discounts to the principal amount, we have repurchased more than $220 million of senior notes and reduced our on-balance sheet debt by more than $94 million in recent weeks," ProLogis' chief executive officer Walter C. Rakowich said in a press release.

"In addition, we are currently negotiating term sheets with various lenders for approximately $344 million in new secured borrowings in the United States and have fixed the interest rate on the full amount. We also are targeting new secured debt financings in Japan and are in active discussions with our bank group to restructure our global line of credit," chief financial officer William E. Sullivan added in the release.

In a separate announcement, ProLogis said it will conduct a registered public offering of its common stock. The company plans to sell 115 million common shares. The underwriters will also have a 30-day overallotment option to buy an additional 17.25 million shares.

Merrill Lynch & Co., Citi and Deutsche Bank Securities are acting as joint bookrunners for the offering.

Proceeds from this deal will be used to reduce borrowings under the company's global line of credit and for general corporate purposes.

ProLogis is a Denver-based real estate investment trust.

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