ProLogis refinances $121m in real estate securities

As part of the industrial developer and investment firm’s bid to reduce its debt burden by $2bn, ProLogis has refinanced property securities issued on behalf of its venture with GIC Real Estate, ProLogis Japan Properties Fund II, and backed by the firm's industrial properties in Japan.

ProLogis has refinanced $121 million of real estate securities offered on behalf of its co-investment vehicle with GIC Real Estate as it seeks to delever its balance sheet.

The Denver, Colorado-based industrial developer and investment firm said in a statement it had re-financed ¥11.1 billion ($121 million; €91 million) of TMK-secured financings issued by two banks on behalf of its ProLogis Japan Properties Fund II.

TMK, Tokutei Mokuteki Kaisha, is a tax-favoured, special purpose securitisation vehicle that issues corporate bonds secured by real estate assets, the statement said. The two TMK securities were issued by Sumitomo Mitsui Banking Corporation and The Chiba Bank secured against ProLogis industrial assets.

The ProLogis Japan Properties Fund II is a co-investment vehicle between GIC Real Estate, the Singapore sovereign wealth fund, and ProLogis. GIC invested $600 million for an 80 percent stake in the fund in 2005.

ProLogis said the TMK financings, which originally had three-year maturities with loan-to-values of 40 to 50 percent, were set to mature later this month.

Bill Sullivan, chief financial officer, said the firm was “actively” trying to delever its balance sheet, targeting regional portfolio sales, renegotiating its debt and shrinking its development pipeline and halting new developments. “The closing of these two TMK bonds demonstrates our continued progress with refinancing near-term fund maturities.”