Prologis Inc. priced $2 billion of new bonds Monday that will help fund its deal to buy real estate assets from funds affiliated with Blackstone Inc.
The company sold debt in three parts, according to a person familiar with the deal, including selling more of an existing bond due in 2053. The reopening of the 30-year bond yields 1.6 percentage point over Treasuries said the person, who asked not to be identified as the transaction is private, after initial talks of around 1.85 percentage point.
Proceeds from the industrial real estate firm’s sale will be used for general corporate purposes, including funding a portion of the acquisition of real estate assets and to repay any borrowings under the company’s global credit lines to close the purchase. Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and Toronto-Dominion Bank led the sale.
Prologis “has a reputation and practice” of sustaining liquidity in its company, mainly through its $6.5 billion of credit facilities as of March 31, according to its chief financial officer, Tim Arndt. “The facilities could be used to finance the Blackstone portfolio, but with real estate being a long-term asset, we typically seek to not only preserve liquidity, but to match-fund on tenor our assets and liabilities,” Arndt said in a statement.
Prologis announced Monday it will acquire nearly 14 million square feet of industrial properties from opportunistic real estate funds affiliated with Blackstone for $3.1 billion, funded by cash. It’s the latest in a slew of companies that have announced a merger or acquisition and soon after tapped the bond market.
There were five other US investment-grade bond sales in the market Monday, with borrowers combining to sell $5.3 billion. Dealers have called for $15 billion of new debt sales this week.
(Updates to show deal has priced.)
