Fitch: ProLogis' Ratings Unaffected by Recent Parkridge Asset Acquisition.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch's ratings of ProLogis (NYSE NYSE See: New York Stock Exchange :PLD (Programmable Logic Device) Refers to a variety of logic chips that are programmable at the customer's site, the customer being the vendor of the finished chip, not the end user. ) (Issuer Default Rating [IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ] 'BBB+') are unaffected by its purchase of the industrial development business, 25% share of the retail business and the acquisition of an associated logistics development fund of the private United Kingdom (UK) based Parkridge. The deal total of $1.03 billion (excluding earnouts) is being funded by roughly a 70/30 split of cash and stock, with the cash portion being supported by availability under its current unsecured credit facility and a new unsecured multi-currency term loan. Although the additional debt will push up leverage somewhat, Fitch expects that by year-end, leverage should revert to historical levels, through asset sales or other means. Additionally, the acquisition will slightly push down PLD's recurring EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become coverage ratios over the near term, and the bulking up of its overall development business could lead to higher levels of cash flow volatility. PLD's globally dispersed, relatively granular development portfolio and its ability to ratchet back its development program, due to short warehouse construction periods, offset concerns related to a potential slowdown in demand for industrial warehouses. With this acquisition, ProLogis is enhancing its land bank and warehouse portfolio by purchasing 800 acres of land in the UK and a smaller component in Central Europe, 10 industrial projects in the construction phase and multiple initiated projects in Central Europe. The acquisition also includes a 25% share in Parkridge's retail business and a 100% stake in a Central European development fund The European Development Fund (EDF) is the main instrument for European Community aid for development cooperation in the Africa, Caribbean and Pacific (ACP) countries and the Overseas Countries and Territories (OCT). . The transaction deepens PLD's footprint in Europe, especially in the UK where buildable build·a·ble adj. Suitable or available for building: "The problem was finding a site that was well located, appropriately zoned . . . and buildable" Sam Hall Kaplan. land is scarce, and enhances its development team with the addition of 23 Parkridge development specialists. In line with PLD's existing portfolio characteristics, it is Fitch's understanding that the acquired warehouses in construction and those projects that were recently initiated will evidence the same attributes, such as strong quality of tenants and tenant diversity. Although retail is not a prime focus for PLD, the acquired share of the retail business provides a measure of diversity and enhances the modestly sized retail business brought over with the Catellus acquisition in September of 2005. At Dec. 31, 2006, retail related assets represented roughly 2% of total on balance sheet assets. Headquartered in Denver, Colorado, ProLogis owns, manages, and develops, industrial distribution facilities in 80 markets in North America, Europe and Asia. ProLogis owns or manages over 422 million square feet and serves approximately 4,700 customers. The company's own asset base was approximately $15.9 billion at the end of the fourth quarter. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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