LONDON, March 9 (Reuters) - ProLogis European Properties PEPR.AS (PEPR), Europe’s largest warehouse and distribution property owner, is to pay back 336 million euros of commercial mortgage-backed securities (CMBS) debt three months early.
PEPR said it would tap cash reserves and an existing 900 million euro ($1.14 billion) unsecured credit facility to repay the debts, as part of a plan to improve liquidity and shore up its balance sheet.
The move is set to save around 1 million euros of interest expenses this year and release properties valued at around 550 million euros into its unsecured asset pool.
But shares in the Euronext-listed company, which suspended its dividend just before Christmas, fell 7.3 percent to 1.39 euros by 1203 GMT amid concerns for much larger liabilities due to mature next year.
“Although a small step forward, PEPR is not out of the woods”, analysts at JPMorgan said in a note to clients.
“We remain concerned over the 1 billion euros of debt PEPR is required to repay in 2010, while it is sailing close to its loan covenants,” the analysts said. ($1=.7909 Euro) (Reporting by Sinead Cruise; Editing by Jon Loades-Carter) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)