Prologis, despite recent asset disposals, is marketing dollar bonds with record-high yields, highlighting ongoing investor concerns about its financial health. The company’s initial pricing guidance for its three-year bond stands at approximately 10.375%, rated BB by Fitch. This yield is significantly higher compared to its 4.6% coupon for perpetual dollar bonds in 2021.
Analysts in the industry have noted that the double-digit initial pricing guidance suggests Prologis might appear somewhat desperate. The company anticipates completing a major asset disposal by mid-2025 and its willingness to offer a relatively high interest rate for the three-year bonds might continue to draw attention to its current liquidity and funding channels.
Earlier this month, Prologis announced plans to buy back existing notes due in June 2025, which amount to a principal of $1 billion. The company stated that the tender offer aims to manage approaching bond maturities. According to Fitch’s report this month, Prologis has sufficient liquidity to repay the 2025 maturing notes even without issuing new bonds.
As of Monday morning, based on compiled data, the yield to maturity for Prologis’s $1 billion 3.875% coupon bonds, which are planned for repurchase, stands at 8.2%. The yield for its perpetual bonds with a 4.5% coupon is around 12%.