Debt

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt

NOTE 5. DEBT

All debt is incurred by the OP or its consolidated subsidiaries. The following table summarizes our debt (dollars in thousands):

	September 30, 2022					December 31, 2021
	Weighted Average			Amount		Weighted Average			Amount
	Interest Rate (1)	Term (2)		Outstanding (3)		Interest Rate (1)	Term (2)		Outstanding (3)
Credit facilities	1.4%		2.2	$	520,446	0.8%		1.6	$	491,393
Senior notes	1.8%		10.8		15,747,632	1.7%		11.6		14,981,690
Term loans and unsecured     other	1.4%		5.5		1,377,246	0.5%		4.2		1,825,195
Secured mortgage	2.4%		3.4		493,975	5.1%		4.7		416,776
Total	1.8%		10.0	$	18,139,299	1.6%		10.4	$	17,715,054

(1) The weighted average interest rates presented represent the effective interest rates (including amortization of debt issuance costs and noncash premiums or discounts) at the end of the period for the debt outstanding and include the impact of designated interest rate swaps, which effectively fix the interest rate on certain variable rate debt.

(2) The weighted average term represents the remaining maturity in years on the debt outstanding at period end.

(3) We borrow in the functional currencies of the countries where we invest. Included in the outstanding balances were borrowings denominated in the following currencies:

	September 30, 2022								December 31, 2021
	Weighted Average Interest Rate			Amount Outstanding		% of Total			Weighted Average Interest Rate			Amount Outstanding		% of Total
British pound sterling		2.2	%	$	1,143,856		6.3	%		2.1	%	$	1,376,807		7.8	%
Canadian dollar		3.9	%		441,252		2.4	%		2.7	%		283,773		1.6	%
Euro		1.2	%		7,618,592		42.0	%		1.0	%		7,408,407		41.8	%
Japanese yen		0.9	%		2,857,718		15.8	%		0.9	%		2,878,542		16.2	%
U.S. dollar		2.7	%		6,077,881		33.5	%		2.6	%		5,767,525		32.6	%
Total		1.8	%	$	18,139,299		100.0	%		1.6	%	$	17,715,054		100.0	%

Credit Facilities

In June, we terminated our global senior credit facility (the “2019 Global Facility”) and entered into the 2022 Global Facility with a borrowing capacity of up to $3.0 billion (subject to currency fluctuations). We also upsized our second global senior credit facility (the “2021 Global Facility”), increasing its borrowing capacity up to $2.0 billion (subject to currency fluctuations). We may draw on both facilities in British pounds sterling, Canadian dollars, euro, Japanese yen, Mexican pesos and U.S. dollars on a revolving basis. During the recast of both facilities, we modified the base rate of the aggregate lender commitments in U.S. dollars from the U.S. dollar London Inter-bank Offered Rate to the Secured Overnight Financing Rate. The 2021 Global Facility is scheduled to initially mature in April 2024 and the 2022 Global Facility in June 2026; however, we can extend the maturity date for each facility by six months on two occasions, subject to the payment of extension fees. We have the ability to increase the 2021 Global Facility to $2.5 billion and the 2022 Global Facility to $4.0 billion, subject to currency fluctuations and obtaining additional lender commitments.

We also have a Japanese yen revolver (the “Yen Credit Facility”) with total commitments of ¥55.0 billion ($380.2 million at September 30, 2022). We have the ability to increase the borrowing capacity of the Yen Credit Facility to ¥75.0 billion ($518.5 million at September 30, 2022), subject to obtaining additional lender commitments. The Yen Credit Facility is initially scheduled to mature in July 2024; however, we may extend the maturity date for one year, subject to the payment of extension fees.

We refer to the 2021 Global Facility, the 2022 Global Facility and the Yen Credit Facility, collectively, as our “Credit Facilities.” Pricing for the Credit Facilities, including the spread over the applicable benchmark and the rates applicable to facility fees and letter of credit fees, varies based on the public debt ratings of the OP.

Liquidity

The following table summarizes information about our available liquidity at September 30, 2022 (in millions):

Aggregate lender commitments
Credit Facilities	$	5,248
Less:
Borrowings outstanding		520
Outstanding letters of credit		25
Current availability	$	4,703
Cash and cash equivalents		636
Total liquidity	$	5,339

Senior Notes

The following table summarizes the issuances of senior notes during the nine months ended September 30, 2022 (principal in thousands):

	Aggregate Principal				Issuance Date Weighted Average
Issuance Date	Borrowing Currency		USD (1)		Interest Rate (2)	Term (3)		Maturity Dates
January	£	60,000	$	80,932	2.1%		20.0	December 2041
February (4)	€	1,550,000	$	1,768,240	1.0%		8.5	February 2024 – 2034
July	¥	30,964,500	$	226,588	1.4%		15.5	July 2027 – 2042
September (4)	$	650,000	$	650,000	4.6%		10.3	January 2033
Total			$	2,725,760	2.0%		9.8

(1) The exchange rate used to calculate into U.S. dollars was the spot rate at the settlement date.

(2) The weighted average interest rate represents the fixed or variable interest rates of the related debt at the issuance date.

(3) The weighted average term represents the remaining maturity in years on the related debt at the issuance date.

(4) A portion of net proceeds from the issuance of these notes were used to finance green projects eligible under our green bond framework.

On October 6, 2022, we completed an exchange offer and consent solicitation for nine series of Duke’s senior notes for an aggregate amount of $3.4 billion, with $3.2 billion, or 96%, of the aggregate principal amount being validly tendered for exchange. The validly tendered senior notes were exchanged for notes issued by the OP. As a result of the consent solicitation, we have no separate remaining financial reporting obligations or financial covenants associated with the senior notes assumed in the Duke Transaction. All other terms of the assumed Duke senior notes remained substantially the same.

Term Loans

In July 2022, we paid down our existing term loan in Canada of CAD $170.5 million ($133.5 million) and entered into a new term loan in Canada (“2022 Canadian Term Loan”) for CAD $300.0 million ($218.2 million at September 30, 2022), bearing interest at the Canada Dollar Offered Rate (“CDOR”) plus a spread over the applicable benchmark and maturing in August 2025, however, we can extend the maturity date by one year on two occasions, subject to the payment of extension fees. As the CDOR interest rate will transition to the Canadian Overnight Repo Rate Average (“CORRA”) prior to June 30, 2024, we anticipate modifying the interest rate on this loan prior to this transition and do not expect it to have a material impact on our Consolidated Financial Statements.

Long-Term Debt Maturities

Scheduled principal payments due on our debt for the remainder of 2022 and for each year through the period ended December 31, 2026, and thereafter were as follows at September 30, 2022 (in thousands):

	Unsecured
	Credit		Senior			Term Loans			Secured
Maturity	Facilities		Notes			and Other			Mortgage			Total
2022 (1)	$	-	$	292,440		$	3		$	1,714		$	294,157
2023 (1)		-		-			-			177,547			177,547
2024 (2)		377,162		292,440			-			93,519			763,121
2025 (3)		-		34,565			219,421			134,100			388,086
2026 (4)		143,284		887,279			587,672			3,466			1,621,701
Thereafter		-		14,322,660			574,649			74,629			14,971,938
Subtotal		520,446		15,829,384			1,381,745			484,975			18,216,550
Unamortized premiums (discounts), net		-		(6,306	)		-			9,781			3,475
Unamortized debt issuance costs, net		-		(75,446	)		(4,499	)		(781	)		(80,726	)
Total	$	520,446	$	15,747,632		$	1,377,246		$	493,975		$	18,139,299

(1) We expect to repay the amounts maturing in the next twelve months with cash generated from operations, proceeds from dispositions of real estate properties, or as necessary, with additional borrowings.

(2) Included in the 2024 maturities is the 2021 Global Facility and Yen Credit Facility that can be extended until 2025.

(3) Included in the 2025 maturities is the 2022 Canadian Term Loan that can be extended until 2027.

(4) Included in the 2026 maturities is the 2022 Global Facility that can be extended until 2027.

Financial Debt Covenants

Our senior notes, term loans and Credit Facilities outstanding at September 30, 2022 were subject to certain financial covenants under their related documents. At September 30, 2022, we were in compliance with all of our financial debt covenants.

Guarantee of Finance Subsidiary Debt

We have finance subsidiaries as part of our operations in Europe (Prologis Euro Finance LLC), Japan (Prologis Yen Finance LLC) and the U.K. (Prologis Sterling Finance LLC) in order to mitigate our foreign currency risk by borrowing in the currencies in which we invest. These entities are 100% indirectly owned by the OP and all unsecured debt issued or to be issued by each entity is or will be fully and unconditionally guaranteed by the OP. There are no restrictions or limits on the OP’s ability to obtain funds from its subsidiaries by dividend or loan. In reliance on Rule 13-01 of Regulation S-X, the separate financial statements of Prologis Euro Finance LLC, Prologis Yen Finance LLC and Prologis Sterling Finance LLC are not provided.