ProLogis Credit Rating
I meant to post this a while ago but I got sidetracked.
After ProLogis lowered its earnings outlook, Fitch maintained its debt ratings. I wonder if they will stick by these ratings when ProLogis is a dead carcas in Bankruptcy court and all the creditors are fighting over all the bloody little bits. Here are the ratings:
• Issuer default rating (IDR) — BBB+;
• $2.2 billion in outstanding unsecured credit lines (as of June 30) — BBB+;
• $4.8 billion of senior unsecured notes — BBB+;
• $2.9 billion of senior unsecured convertible notes — BBB+;
• $350 million preferred stock — BBB.
Fitch’s BBB rating relates to medium-class companies that currently are satisfactory.
Fitch ratings range from AAA for the best-quality, most stable companies to CCC for vulnerable companies.
Keep in mind, that this is not a rating for the common stock. By definition, common stock is “common” and will have lesser priority than all of the above debt.
October 3rd, 2008 at 11:37 am
Richard,
I’ve been looking at PLD as well — great analysis so far.
Would you do an analysis on Prologis’ Fund business. Insinuation here is that I’m under the impression that they are more or less a fund manager now. I think they’ve transferred more risk away from the firm than one might realize (although they have a stake in the funds)….
Dig deep
October 3rd, 2008 at 11:44 am
I wouldnt characterize them as a fund manager - I think they are an Investment Bank. Instead of $, they bank land and industrial property. This was genius when land was going up, up, up. Now they are screwed.
I’ll try and pull out some interesting tidbits about PLD’s different funds this weekend. One thing I would really like to know: IS THERE LEVEREAGE IN THE UNDERLYING PROPERTY FUNDS AS WELL? I don’t think there is a way to determine this from the public filings.
November 7th, 2008 at 9:49 am
We’re doing some analysis on PLD and trying to figure out, if they go under, what can unsecured debt holders expect to get out of this?
November 7th, 2008 at 9:56 am
Nick-
What unsecured creditors will get really depends on what level they are at? It will be different if you are talking about a general unsecured creditor like a vendor or a preferred stockholder. Also, the structure of the secured loans and the realistic sales price of those assets will also matter.
I think that’s a tough job without access to good info. Let me know if I can help.