Note 7. Debt

All debt is incurred by the Operating Partnership. The Parent does not have any indebtedness, but guarantees the unsecured debt of the Operating Partnership.

The following table summarizes our debt (dollars in thousands):

	September 30, 2015					December 31, 2014
	Weighted Average Interest Rate (1)			Amount Outstanding (2)		Weighted Average Interest Rate (1)			Amount Outstanding
Credit facilities		1.2	%	$	207,978		-		$	-
Senior notes		3.3	%		6,622,440		3.6	%		6,076,920
Exchangeable senior notes		-			-		3.3	%		456,766
Term loans		1.4	%		2,442,848		1.3	%		572,730
Other debt		6.2	%		15,648		6.2	%		16,086
Secured mortgage debt		6.4	%		785,480		6.1	%		1,050,591
Secured mortgage debt of consolidated entities		2.7	%		1,859,961		2.5	%		1,207,106
Totals		3.0	%	$	11,934,355		3.6	%	$	9,380,199

(1)	The interest rates presented represent the effective interest rates (including amortization of the noncash premiums or discounts).

(2)	Included in the outstanding balances are borrowings denominated in non-U.S. currency, principally: euro ($3.6 billion) and Japanese yen ($1.0 billion).

Credit Facilities

We have a global senior credit facility (the “Global Facility”), under which we may draw in U.S. dollars, euro, Japanese yen, British pounds sterling and Canadian dollars on a revolving basis up to $2.3 billion at September 30, 2015, subject to currency fluctuations. We also have a ¥45 billion ($374.3 million at September 30, 2015) Japanese yen revolver (the “Revolver”) with availability to increase to ¥56.5 billion. We refer to the Global Facility and the Revolver, collectively, as our “Credit Facilities.”

The following table summarizes information about our Credit Facilities at September 30, 2015 (in millions):


Aggregate lender commitments	$	2,682
Less:
Borrowings outstanding		208
Outstanding letters of credit		31
Current availability	$	2,443

Senior Notes

In May 2015, we issued €700.0 million ($785.5 million) of senior notes with an interest rate of 1.375%, maturing in 2021, at 99.112% of par value for an all-in rate of 1.531%. We used the net proceeds for general corporate purposes and to fund a portion of our share of the purchase price of KTR.

On October 27 2015, we issued $750.0 million in principal amount of senior notes with an interest rate of 3.750% maturing in November 2025. We intend to use a portion of the net proceeds to repurchase all of the outstanding principal amount ($300.0 million) of our 4.5% senior unsecured notes due in 2017. In connection with the offering, we commenced a tender offer through which we may utilize a portion of the net proceeds to repurchase a portion of our senior notes that mature in 2019 and 2020 for an aggregate purchase price up to approximately $200 million including premiums and accrued interest. The tender offer is expected to expire on November 24, 2015. We also intend to use a portion of the net proceeds for other corporate purposes, including other debt repayment or repurchases.

Exchangeable Senior Notes

During March 2015, the holders of the exchangeable notes exchanged $459.8 million of their notes for 11.9 million shares of common stock of the Parent and $0.2 million of their notes for cash.

The fair value of the derivative associated with the exchangeable debt was a liability of $51.3 million at December 31, 2014. The fair value of the exchange option was $43.0 million immediately before the exchange in March 2015. When the debt was exchanged into common stock, the value of the derivative associated with the debt was reclassified to Additional Paid-In Capital in the Consolidated Balance Sheets. We recognized unrealized gains or losses resulting from the change in fair value of the derivative. We recognized gains of $8.3 million in the first quarter of 2015 and gains of $27.6 million and $21.2 million for the three and nine months ended September 30, 2014, respectively, in Foreign Currency and Derivative Gains (Losses) and Related Amortization, Net in the Consolidated Statements of Operations.

Term Loans

In May 2015, we entered into an unsecured senior term loan agreement (the “Senior Term Loan”) under which we can draw in U.S. dollars in an aggregate amount not to exceed $1.0 billion. We may pay down and reborrow under the Senior Term Loan. The interest rate on the Senior Term Loan is LIBOR plus 100 basis points and is scheduled to mature in May 2016; however we may extend the maturity date by one year, subject to the satisfaction of certain conditions and the payment of an extension fee. The Senior Term Loan contains customary representations, covenants and defaults (including cross payment default and cross-acceleration to other recourse indebtedness of more than $100.0 million). In connection with the KTR acquisition, we borrowed $ 1.0 billion, causing the Senior Term Loan to be fully drawn at September 30, 2015.

In June 2015, we entered into an unsecured senior term loan agreement (the “2015 Yen Term Loan”) under which we can draw in Japanese yen in an aggregate amount not to exceed ¥65.0 billion ($540.6 million at September 30, 2015). The interest rate on the 2015 Yen Term Loan is yen LIBOR plus 110 basis points and is scheduled to mature in 2022. In connection with the KTR acquisition, we borrowed ¥65.0 billion ($540.6 million), causing the 2015 Yen Term Loan to be fully drawn at September 30, 2015.

We also have an unsecured senior term loan agreement (the “Euro Term Loan”) under which loans can be obtained in U.S. dollars, euro, Japanese yen and British pounds sterling in an aggregate amount not to exceed €500 million at the time of borrowing. At December 31, 2014, we had an outstanding balance of €190 million ($230.7 million). During 2015, we borrowed an additional €240 million ($272.6 million). During the second quarter of 2015, we paid off the entire euro balance and subsequently borrowed $561.9 million, causing the Euro Term Loan to be fully drawn at September 30, 2015.

We also have an unsecured senior term loan agreement (the “2014 Yen Term Loan”) under which we can draw in Japanese yen in an aggregate amount not to exceed ¥40.9 billion ($340.3 million at September 30, 2015) that is scheduled to mature in 2021. The 2014 Yen Term Loan was fully drawn at September 30, 2015 and December 31, 2014.

Secured Mortgage Debt and Secured Mortgage Debt of Consolidated Entities

During 2015, we repurchased $286.5 million of secured mortgage debt prior to maturity, resulting in a net loss on early extinguishment of $16.5 million.

In connection with the KTR acquisition, USLV assumed secured mortgage debt valued at $735.2 million, which includes premiums of $30.5 million. The debt has interest rates ranging from 1.8% to 6.8% (effective interest rates ranging from 2.7% to 2.9%) and is scheduled to mature July 2017 to January 2020. See Note 2 for more information on this transaction.

Long-Term Debt Maturities

Principal payments due on our debt, for the remainder of 2015 and for each of the years in the period ending December 31, 2024, and thereafter were as follows at September 30, 2015 (in millions):

	Prologis
	Unsecured
		Credit		Senior			Term Loans and		Secured Mortgage					Consolidated Entities’		Total Consolidated
Maturity		Facilities		Notes			Other Debt		Debt		Total			Debt		Debt
2015 (1)		$	-	$	-		$	-	$	15	$	15		$	3	$	18
2016 (1) (2)			-		-			1,001		199		1,200			455		1,655
2017 (3)			197		377			563		6		1,143			516		1,659
2018			11		262			1		112		386			403		789
2019			-		693			1		285		979			143		1,122
2020			-		1,040			1		6		1,047			252		1,299
2021			-		1,284			341		11		1,636			1		1,637
2022			-		784			542		7		1,333			1		1,334
2023			-		850			1		7		858			1		859
2024			-		784			1		129		914			1		915
Thereafter			-		560			7		-		567			3		570
Subtotal			208		6,634			2,459		777		10,078			1,779		11,857
Unamortized premiums (discounts), net			-		(12	)		-		8		(4	)		81		77
Totals		$	208	$	6,622		$	2,459	$	785	$	10,074		$	1,860	$	11,934

(1)	We expect to repay the amounts maturing in 2015 and 2016 related to our wholly owned debt with cash generated from operations, proceeds from the disposition of wholly owned real estate properties, or as necessary, with borrowings on our Credit Facilities.

(2)	Included in our debt is a Senior Term Loan that can be extended until 2017.

(3)	Included in our debt is a Global Facility that can be extended until 2018 and a term loan that can be extended until 2019.

Debt Covenants

Our debt agreements contain various covenants, including maintenance of specified financial ratios. At September 30, 2015, we were in compliance with all covenants.