ProLogis, the world’s largest warehouse owner, plans to cut debt by almost $3.5 billion this year, an increase from previous plans to reduce loans by $2 billion, chief executive Walter Rakowich said.
“We’ve made a tremendous amount of progress in really the last six to seven months,” Rakowich said during a presentation Wednesday at a National Association of Real Estate Investment Trusts conference in New York.
ProLogis is reducing borrowing by eliminating new developments, selling properties and raising equity. The Denver-based company sold 174.8 million shares of common stock in April and spent the $1.15 billion raised to pay loans. The company is selling $657 million of assets. About $142 million of sales have been completed, and 80 percent to 90 percent will be completed by the end of this month, executives said.
ProLogis has been buying back debt at a discount. It has completed about $850 million to $900 million of debt repurchases so far, paying just over 70 cents on the dollar, executives said.
ProLogis also is reducing the size of its credit line to $2 billion to $2.5 billion from about $4.2 billion in its existing line, which runs through October 2010.
The company doesn’t need “anywhere near that capacity” and expects to complete an agreement on the new, unsecured line by August, chief financial officer William Sullivan said Wednesday. “We feel pretty good about it,” he said.
