Debt

All debt is held directly or indirectly by the Operating Partnership. The REIT itself does not have any indebtedness, but guarantees the unsecured debt of the Operating Partnership. We generally do not guarantee the debt issued by non-wholly owned subsidiaries.

Our debt consisted of the following (dollars in thousands):


	June 30, 2013					December 31, 2012
	Weighted Average Interest Rate (1)			Amount Outstanding (2)		Weighted Average Interest Rate (1)			Amount Outstanding
Credit Facilities		1.6	%	$	630,836		1.5	%	$	888,966
Senior notes (3)		5.6	%		4,436,785		5.6	%		5,223,136
Exchangeable senior notes (4)		3.3	%		397,481		4.6	%		876,884
Secured mortgage debt (5)		5.1	%		1,974,909		4.0	%		3,625,908
Secured mortgage debt of consolidated entities		4.5	%		308,204		4.4	%		450,923
Other debt of consolidated entities		4.8	%		14,437		4.8	%		67,749
Other debt		1.8	%		654,658		1.8	%		657,228

Totals		4.7	%	$	8,417,310		4.4	%	$	11,790,794

(1)	The interest rates presented represent the effective interest rates (including amortization of the non-cash premiums or discount).

(2)	Included in the outstanding balances are borrowings denominated in non-U.S. currency, principally: euro ($1.2 billion) and Japanese yen ($0.6 billion).

(3)

In the second quarter of 2013, we incurred $32.6 million of debt extinguishment costs, primarily due to the prepayment of $350 million senior notes that were scheduled to mature in 2014, that were included in Gains (Losses) on Early Extinguishment of Debt, Net in our Consolidated Statements of Operations. In addition, we repaid $202.3 million of outstanding senior notes at maturity.

(4)

The weighted average coupon interest rate was 3.3% and 2.8% as of June 30, 2013 and December 31, 2012, respectively. During the second quarter of 2013, we repaid $342.2 million of these notes. As of June 30, 2013, we only have one series of exchangeable notes outstanding with a coupon interest rate of 3.3%.

(5)	In the first quarter of 2013, we repaid $1.4 billion of outstanding secured mortgage debt with the proceeds received from contributions of properties to PELP and NPR. In addition, we transferred $353.2 million of debt to PELP in connection with the contribution.

Credit Facilities

During the six months ended June 30, 2013, we had a global senior credit facility where funds may be drawn in U.S. dollar, euro, Japanese yen, British pound sterling and Canadian dollar on a revolving basis up to $1.6 billion (subject to currency fluctuations). On July 11, 2013, we terminated the existing facility and entered into a new facility (collectively the “Global Facility”), where we may draw in the aforementioned currencies on a revolving basis in an aggregate amount not exceeding $2.0 billion (subject to currency fluctuations). We may increase the Global Facility to $3.0 billion (subject to currency fluctuations and obtaining additional lender commitments). The Global Facility is scheduled to mature on July 11, 2017; however, we may extend the maturity date by six months twice, subject to satisfaction of certain conditions and payment of an extension fee. Pricing under the Global Facility, including the spread over LIBOR, facility fees and letter of credit fees, varies based upon the public debt ratings of the Operating Partnership. The Global Facility contains customary representations, covenants and defaults (including a cross-acceleration to other recourse indebtedness of more than $50 million).

We also have a ¥36.5 billion (approximately $369.0 million at June 30, 2013) Japanese yen revolver (the “Revolver”). The Revolver matures on March 1, 2014, but we may, at our option and subject to the satisfaction of customary conditions and payment of an extension fee, extend the maturity date to February 27, 2015. We may increase availability under the Revolver to an amount not exceeding ¥56.5 billion (approximately $571.2 million at June 30, 2013) subject to obtaining additional lender commitments. Pricing under the Revolver was consistent with the Global Facility pricing as of June 30, 2013. The Revolver contains certain customary representations, covenants and defaults that are substantially the same as the corresponding provisions of the Global Facility.

We refer to the Global Facility and the Revolver, collectively, as our “Credit Facilities”.

Commitments and availability under our Credit Facilities as of June 30, 2013 were as follows (dollars in millions):


Aggregate lender - commitments	$	2,026.1
Less:
Borrowings outstanding		630.8
Outstanding letters of credit		68.2

Current availability	$	1,327.1

In February 2013, we entered into a $500 million bridge loan under which we can borrow in U. S. dollar, euro or yen. We borrowed ¥20 billion ($215.7 million) under the bridge loan to make our initial cash investment in NPR. In connection with the contribution of properties to NPR, we paid the borrowings outstanding on this bridge loan and terminated the facility.

Exchangeable Senior Notes

The accounting for the exchangeable senior notes requires us to separate the fair value of the derivative instrument (exchange feature) from the debt instrument and account for it separately as a derivative. At each reporting period, we adjust the derivative instrument to fair value with the resulting adjustment being recorded in earnings as Foreign Currency and Derivative Gains (Losses), Net. The fair value of the derivative associated with our exchangeable notes was a liability of $52.9 million and $39.8 million at June 30, 2013 and December 31, 2012, respectively. We recognized an unrealized loss of $12.1 million and $13.1 million for the three and six months ended June 30, 2013, respectively, and an unrealized gain of $14.4 million and an unrealized loss of $12.4 million for the three and six months ended June 30, 2012, respectively.

Long-Term Debt Maturities

Principal payments due on our debt, for the remainder of 2013 and for each of the years in the ten-year period ending December 31, 2022 and thereafter was as follows (in millions):


	Prologis
	Unsecured									Secured				Consolidated		Total
	Senior		Exchangeable			Credit		Other		Mortgage				Entities’		Consolidated
Maturity	Debt		Notes			Facilities		Debt		Debt		Total		Debt (1)		Debt
2013 (2)	$	92	$	—		$	—	$	—	$	41	$	133	$	42	$	175
2014 (2) (3)		557		—			322		638		475		1,992		36		2,028
2015		175		460			309		1		149		1,094		25		1,119
2016		640		—			—		1		312		953		126		1,079
2017		700		—			—		1		264		965		4		969
2018		900		—			—		1		113		1,014		74		1,088
2019		647		—			—		1		294		942		2		944
2020		662		—			—		1		9		672		2		674
2021		—		—			—		1		135		136		2		138
2022		—		—			—		—		7		7		2		9
Thereafter		—		—			—		10		137		147		6		153

Subtotal		4,373		460			631		655		1,936		8,055		321		8,376
Unamortized premiums (discounts), net		64		(63	)		—		—		39		40		1		41

Total	$	4,437	$	397		$	631	$	655	$	1,975	$	8,095	$	322	$	8,417

(1)	Our consolidated entities have $7.6 million available to borrow under credit facilities.

(2)

We expect to use the proceeds from property dispositions, cash on hand, and borrowings on our Credit Facilities to repay 2013 maturities of our wholly owned debt. Of the amounts maturing in 2014, we expect to extend or pay these amounts with proceeds from asset sales, available cash and borrowings on our Credit Facilities. The maturities in 2013 of debt of our consolidated but not wholly owned subsidiaries includes $42.0 million of secured mortgage debt, which we expect to extend, or pay, through the issuance of new debt, with proceeds from asset sales, available cash, or equity contributions to our consolidated entities by us and our venture partners.

(3)	On July 10, 2013, we repaid $160.0 million of secured mortgage debt with a scheduled maturity date in 2014.

Debt Covenants

Our debt agreements contain various covenants, including maintenance of specified financial ratios. As of June 30, 2013, we were in compliance with all covenants.