Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

NOTE 8. DEBT

All debt is incurred by the OP or its consolidated subsidiaries. The following table summarizes our debt at December 31 (dollars in thousands):

	2021					2020
	Weighted Average			Amount		Weighted Average			Amount
	Interest Rate (1)	Term (2)		Outstanding (3)		Interest Rate (1)	Term (2)		Outstanding (3)
Credit facilities	0.8%		1.6	$	491,393	0.8%		2.0	$	171,794
Senior notes (4)	1.7%		11.6		14,981,690	2.0%		11.2		14,275,870
Term loans and      unsecured other	0.5%		4.2		1,825,195	0.9%		5.6		1,764,311
Secured mortgage (5)	5.1%		4.7		416,776	3.1%		3.0		637,101
Total	1.6%		10.4	$	17,715,054	1.9%		10.2	$	16,849,076

(1) The weighted average interest rates presented represent the effective interest rates (including amortization of debt issuance costs and noncash premiums or discounts) at the end of the period for the debt outstanding and include the impact of designated interest rate swaps, which effectively fix the interest rate on certain variable rate debt.

(2) The weighted average term represents the remaining maturity in years on the debt outstanding at period end.

(3) We borrow in the functional currencies of the countries where we invest. Included in the outstanding balances at December 31 were borrowings denominated in the following currencies:

	2021								2020
	Weighted Average Interest Rate			Amount Outstanding		% of Total			Weighted Average Interest Rate			Amount Outstanding		% of Total
British pound sterling		2.1	%	$	1,376,807		7.8	%		2.2	%	$	1,019,480		6.1	%
Canadian dollar		2.7	%		283,773		1.6	%		2.7	%		285,708		1.7	%
Euro		1.0	%		7,408,407		41.8	%		1.4	%		6,549,676		38.8	%
Japanese yen		0.9	%		2,878,542		16.2	%		0.8	%		2,877,247		17.1	%
U.S. dollar		2.6	%		5,767,525		32.6	%		2.8	%		6,116,965		36.3	%
Total		1.6	%	$	17,715,054		100.0	%		1.9	%	$	16,849,076		100.0	%

(4) Senior notes are due from February 2022 to June 2061 with effective interest rates ranging from -0.2% to 4.5% at December 31, 2021.

(5) Secured mortgage debt is due from October 2022 to September 2033 with effective interest rates ranging from 3.3% to 7.8% at December 31, 2021. The debt was principally secured by 90 operating properties and 1 land parcel with an aggregate undepreciated cost of $1.4 billion at December 31, 2021.

Credit Facilities

We have a global senior credit facility (the “2019 Global Facility”) under which we may draw in British pound sterling, Canadian dollars, euro, Japanese yen, Mexican pesos and U.S. dollars on a revolving basis up to $3.5 billion (subject to currency fluctuations). In April 2021, we entered into a second global senior credit facility (the “2021 Global Facility”) under which we may draw in Canadian dollars, euro, British pound sterling, Japanese yen, Mexican pesos and U.S. dollars on a revolving basis up to $1.0 billion (subject to currency fluctuations). The 2019 Global Facility is scheduled to initially mature in January 2023 and the 2021 Global Facility in April 2024;

however, we may extend the maturity date for both facilities by six months on two occasions, subject to the payment of extension fees. We have the ability to increase the 2019 Global Facility to $4.5 billion and the 2021 Global Facility to $2.0 billion, subject to currency fluctuations and obtaining additional lender commitments.

We also have a Japanese yen revolver (the “Yen Credit Facility”) with total commitments of ¥55.0 billion ($477.8 million at December 31, 2021). We have the ability to increase the borrowing capacity of the Yen Credit Facility to ¥75.0 billion ($651.5 million at December 31, 2021), subject to obtaining additional lender commitments. The Yen Credit Facility is initially scheduled to mature in July 2024; however, we may extend the maturity date for one year, subject to the payment of extension fees.

We refer to the 2019 Global Facility, the 2021 Global Facility and the Yen Credit Facility, collectively, as our “Credit Facilities.” Pricing for the Credit Facilities, including the spread over the applicable benchmark and the rates applicable to facility fees and letter of credit fees, varies based on the public debt ratings of the OP.

Liquidity

The following table summarizes information about our available liquidity (dollars in millions):

	2021			2020			2019
For the years ended December 31:
Weighted average daily interest rate		1.3	%		1.1	%		1.5	%
Weighted average daily borrowings	$	60		$	109		$	85
Maximum borrowings outstanding at any month-end	$	491		$	727		$	257
At December 31:
Aggregate lender commitments
Credit Facilities	$	4,940		$	4,119		$	3,946
Less:
Borrowings outstanding		491			172			184
Outstanding letters of credit		7			24			36
Current availability	$	4,442		$	3,923		$	3,726
Available term loans		-			250			500
Cash and cash equivalents		556			598			1,089
Total liquidity	$	4,998		$	4,771		$	5,315

Senior Notes

The senior notes are unsecured and our obligations are effectively subordinated in certain respects to any of our debt that is secured by a lien on real property, to the extent of the value of such real property. The senior notes require interest payments be made quarterly, semi-annually or annually. The majority of the senior notes are redeemable at any time at our option, subject to certain prepayment penalties. Such repurchase and other terms are governed by the provisions of indenture agreements, various note purchase agreements or trust deeds. The following table summarizes the issuances and redemptions of senior notes during 2021 (principal in thousands):

	Aggregate Principal				Issuance Date Weighted Average
Issuance Date	Borrowing Currency		USD (1)		Interest Rate (2)	Term (3)		Maturity Dates
February	€	1,350,000	$	1,639,305	0.7%		14.3	February 2032 – 2041
February	$	400,000	$	400,000	1.6%		10.1	March 2031
June	¥	65,000,000	$	587,441	0.8%		15.4	June 2028 – 2061
December	£	215,000	$	284,455	2.0%		17.7	December 2033 – 2041
Total			$	2,911,201	1.0%		14.2
	Aggregate Principal				Redemption Date Weighted Average
Redemption Date	Borrowing Currency		USD (1)		Interest Rate (2)	Term (3)		Maturity Dates
March	€	599,514	$	715,700	3.4%		3.0	February 2024
March	$	750,000	$	750,000	3.8%		4.7	November 2025
Total			$	1,465,700	3.6%		3.8

(1) The exchange rate used to calculate into U.S. dollars was the spot rate at the settlement date.

(2) The weighted average interest rate represents the fixed or variable interest rates of the related debt at the issuance or redemption date.

(3) The weighted average term represents the remaining maturity in years on the related debt at the issuance or redemption date.

In 2021, we used the net proceeds from the issuance of the senior notes to fund the senior note redemptions, repay other indebtedness and for general corporate purposes.

Early Extinguishment of Debt

Over the last three years, we repurchased or repaid certain debt before the maturity date in an effort to reduce our borrowing costs and extend our debt maturities. As a result, the difference between the recorded debt (including premiums, discounts and related debt issuance costs) and the consideration we paid to retire the debt, including fees, was recognized as gains or losses. Fees associated with the restructuring of debt that meets the modification criteria, along with existing unamortized premium or discount and debt issuance costs, are amortized over the term of the new debt.

We recognized $187.5 million, $188.3 million and $16.1 million of losses on the early extinguishment of debt in 2021, 2020 and 2019, respectively. The losses during 2021 and 2020 were driven by the redemption of certain higher interest rate senior notes before their stated maturity. We redeemed $1.5 billion of senior notes in 2021, with stated maturities of 2024 and 2025, and $2.6 billion of senior notes in 2020, with stated maturities between 2021 and 2024. The losses in 2020 included the extinguishment of debt assumed in the Liberty Transaction and the IPT Transaction, which represented the excess of the prepayment penalties over the premium recorded upon assumption of the debt.  

Term Loans

The following table summarizes our outstanding term loans at December 31 (dollars and borrowing currency in thousands):

Term Loan	Borrowing Currency	Issuance Date	Lender Commitment at 2021				Amount Outstanding at 2021			Amount Outstanding at 2020			Interest Rate	Maturity Date
			Borrowing Currency		USD		USD			USD
2017 Term Loan (1)	USD, EUR, JPY and GBP	June 2014	$	500,000	$	500,000	$	-		$	250,000		LIBOR + 0.9%	May 2021
2015 Canadian      Term Loan	CAD	December 2015	$	170,506	$	134,173		134,173			133,837		CDOR + 0.9%	February 2023
March 2017 Yen      Term Loan	JPY	March 2017	¥	12,000,000	$	104,243		104,243			116,414		0.9% and 1.0%	March 2027 – 2028
October 2017 Yen      Term Loan	JPY	October 2017	¥	10,000,000	$	86,869		86,869			97,012		0.9%	October 2032
December 2018 Yen      Term Loan	JPY	December 2018	¥	20,000,000	$	173,738		173,738			194,023		1.2% and TIBOR + 0.7%	December 2031 – June 2033
January 2019 Yen      Term Loan	JPY	January 2019	¥	15,000,000	$	130,304		130,304			145,517		TIBOR + 0.5% to 0.6%	January 2028 – 2030
March 2019 Yen      Term Loan	JPY	March 2019	¥	85,000,000	$	738,388		738,388			824,599		TIBOR + 0.4%	March 2026
Subtotal								1,367,715			1,761,402
Debt issuance costs, net								(5,169	)		(7,385	)
Total term loans							$	1,362,546		$	1,754,017

(1) In April 2021, the multi-currency term loan (“2017 Term Loan”) was terminated, the outstanding balance paid down and the interest rate swap contracts associated with the outstanding balance of $250.3 million were settled.

Other Debt

In December 2021, we entered into a loan for €400.0 million ($453.0 million at December 31, 2021) with an interest rate of -0.5% and a maturity of June 2022.

Long-Term Debt Maturities

Scheduled principal payments due on our debt for each year through the period ended December 31, 2026, and thereafter were as follows at December 31, 2021 (in thousands):

	Unsecured
		Credit		Senior			Term Loans			Secured
Maturity		Facilities		Notes			and Other			Mortgage			Total
2022 (1)		$	-	$	509,670		$	462,649		$	13,422		$	985,741
2023 (2)			265,818		-			134,173			35,999			435,990
2024 (3)			225,575		-			-			135,510			361,085
2025			-		43,435			-			144,784			188,219
2026			-		966,179			738,388			3,466			1,708,033
Thereafter			-		13,536,089			495,154			74,629			14,105,872
Subtotal			491,393		15,055,373			1,830,364			407,810			17,784,940
Premiums (discounts), net			-		2,548			-			10,544			13,092
Debt issuance costs, net			-		(76,231	)		(5,169	)		(1,578	)		(82,978	)
Total		$	491,393	$	14,981,690		$	1,825,195		$	416,776		$	17,715,054

(1) We expect to repay the amounts maturing in the next twelve months with cash generated from operations, proceeds from dispositions of real estate properties, or as necessary, with additional borrowings.

(2) Included in the 2023 maturities is the 2019 Global Facility that can be extended until 2024.

(3) Included in the 2024 maturities is the 2021 Global Facility that can be extended until 2025.

Interest Expense

The following table summarizes the components of interest expense for the years ended December 31 (in thousands):

	2021			2020			2019
Gross interest expense	$	299,115		$	348,427		$	271,451
Amortization of debt discounts (premiums), net		(7,478	)		(6,741	)		3,713
Amortization of debt issuance costs, net		16,134			14,600			13,293
Interest expense before capitalization	$	307,771		$	356,286		$	288,457
Capitalized amounts		(41,543	)		(41,779	)		(48,504	)
Net interest expense	$	266,228		$	314,507		$	239,953
Total cash paid for interest, net of amounts capitalized	$	278,861		$	309,390		$	214,375

Financial Debt Covenants

Our senior notes, term loans and Credit Facilities outstanding at December 31, 2021 were subject to certain financial covenants under their related documents. At December 31, 2021, we were in compliance with all of our financial debt covenants.

Guarantee of Finance Subsidiary Debt

We have finance subsidiaries as part of our operations in Europe (Prologis Euro Finance LLC), Japan (Prologis Yen Finance LLC) and the U.K. (Prologis Sterling Finance LLC) in order to mitigate our foreign currency risk by borrowing in the currencies in which we invest. These entities are 100% indirectly owned by the OP and all unsecured debt issued or to be issued by each entity is or will be fully and unconditionally guaranteed by the OP. There are no restrictions or limits on the OP’s ability to obtain funds from its subsidiaries by dividend or loan. In reliance on Rule 13-01 of Regulation S-X, the separate financial statements of Prologis Euro Finance LLC, Prologis Yen Finance LLC and Prologis Sterling Finance LLC are not provided.