ProLogis Scores On Financing and Secondary (PLD)

ProLogis (NYSE: PLD) has successfully raised the cash it was seeking.  And then some.  The warehouse and office park owner and operator REIT had originally planned to sell 115 million shares of common stock to bolster its balance sheet, but it looks like the offering was priced rather strongly at 152 million shares at a price of $6.60 per share, a discount of about 3% to yesterday’s close.

The net proceeds will be used to reduce debt and short-term borrowings under its global line of credit and the rest will be used for general corporate purposes.

The company announced yesterday that its other initiatives taken were that PLD International Finance LLC, a subsidiary, would buy about $57.5 million (converted from Euros) principal amount of notes due in April 2011 for a discount price of about $43 million (also converted from Euros).  ProLogis has also repurchased $162.8 million in principal of convertible notes for about $12 million and $141.1 million of its 1.875% convertible senior notes for right at $72.3 million.

ProLogis is also negotiating with lenders for more than $300 million in new secured borrowings. It is also looking at new debt financing in Japan and is in talks with bankers to restructure its global line of credit (may be set now).

Shares closed at $6.82 yesterday.  The Street really likes this offering so far.  We are seeing shares trade north of $7.25 in early trading as this should get the company’s financial house in order.  The gross proceeds from the offering are roughly $759 million before fees and commissions.  ProLogis has a listed market cap before this offering of $1.83 billion based on yesterday’s close.

At the end of 2008 it had more than $11 billion listed in long-term debt and total liabilities were $12.827 billion.  But it also had land, property and equipment assets of more than $15.5 billion.

This might not clean up the balance sheet entirely and might not get rid of all anything close to all of the debt, but so far it looks like it is making a serious advance in that direction.  To show how battered it is whether this is at $6.60 or north of $7.00, its 52-week trading range is $2.20 to $66.58.

JON C. OGG