| Item 1.01 | Entry into a Material Definitive Agreement. |
On July 25, 2018, Prologis Euro Finance LLC (the “Company”) priced an offering of €700,000,000 aggregate principal amount of its 1.875% Notes due 2029 (the “Notes”). In connection with the offering, the Company and Prologis, L.P. (the “Operating Partnership”) entered into an Underwriting Agreement, dated July 25, 2018 (the “Underwriting Agreement”), with BNP Paribas, Goldman Sachs & Co. LLC and J.P. Morgan Securities plc, and the other underwriters named in Schedule A thereto (the “Underwriters”), pursuant to which the Company agreed to sell and the Underwriters agreed to purchase the Notes, subject to and upon the terms and conditions set forth therein. A copy of the Underwriting Agreement has been filed as an exhibit to this Current Report and is incorporated herein by reference.
The Notes are being issued under an indenture dated as of August 1, 2018 (the “Base Indenture”), among the Company, the Operating Partnership and U.S. Bank National Association, as trustee, as supplemented by the first supplemental indenture, dated as of August 1, 2018 (the Base Indenture, as supplemented by the first supplemental indenture, the “Indenture”).
The issuance and sale of the Notes is expected to close on August 1, 2018. The net proceeds to the Company from the sale of the Notes, after the Underwriter’s discount and offering expenses, are estimated to be approximately €691 million, or $809 million, based on the euro/U.S. dollar rate of exchange as of July 24, 2018. The Company intends to use the net proceeds for general corporate purposes, including to repay or repurchase other indebtedness. In the short-term, the Company intends to place the net proceeds in short-term investments.
The Notes will bear interest at a rate of 1.875% per annum and mature on January 5, 2029. The Notes will be senior unsecured obligations of the Company and will be fully and unconditionally guaranteed by the Operating Partnership.
The Notes will be redeemable in whole at any time or in part from time to time, at the option of the Company, at a redemption price equal to the greater of: (i) 100% of the principal amount of the Notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed that would be due if such Notes matured on October 5, 2028 (in each case exclusive of interest accrued to the redemption date) discounted to the redemption date on an annual basis (assuming a360-day year consisting of twelve30-day months) at the then current Treasury Rate plus 25 basis points. In addition, on or after October 5, 2028 the Notes will be redeemable in whole at any time or in part from time to time, at the Company’s option, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed. In each case, accrued and unpaid interest, if any, will be paid on the Notes being redeemed to, but excluding, the redemption date.
The Indenture governing the Notes restricts, among other things, the Operating Partnership’s and its subsidiaries ability to incur additional indebtedness and to merge or consolidate with any other person or sell, assign, transfer, lease, convey or otherwise dispose of substantially all of its assets.
The Notes are being issued pursuant to the Registration Statement as amended by Post-Effective Amendment No. 1 (FileNo. 333-216491) that the Company and the Operating Partnership filed with the Securities and Exchange Commission (the “SEC”) relating to the public offering from time to time of securities of the Company and the Operating Partnership pursuant to Rule 415 of the Securities Act of 1933, as amended. In connection with filing with the SEC a definitive prospectus supplement, dated July 25, 2018, and base prospectus, dated July 25, 2018, relating to the public offering of the Notes and corresponding guarantees, the Company and the Operating Partnership are filing the Underwriting Agreement, the form of the Base Indenture, the form of the First Supplemental Indenture, the form of the Notes and certain other exhibits with this Current Report of Form8-K as an exhibit to such Registration Statement. See “Item 9.01 – Financial Statements and Exhibits.”
This Current Report does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.
The information under Item 1.01 is incorporated herein by reference.
