8-KOther Events

AVALONBAY COMMUNITIES INC 8-K Report (Jul 15, 2002)

Filed July 15, 2002For Securities:AVB

Summary

AvalonBay Communities, Inc. (AVB) filed an 8-K on July 15, 2002, reporting on two significant financial events. The company announced the redemption of all its Series C Cumulative Redeemable Preferred Stock. This redemption was partially financed by a private placement on July 11, 2002, where AVB sold 592,000 shares of Series I Cumulative Redeemable Preferred Stock to an institutional investor for $25 per share. This transaction aimed to restructure the company's preferred stock obligations, potentially improving its capital structure and financial flexibility.

Key Highlights

  • 1Redemption of all outstanding Series C Cumulative Redeemable Preferred Stock.
  • 2Private placement of 592,000 shares of Series I Cumulative Redeemable Preferred Stock on July 11, 2002.
  • 3Sale price for Series I Preferred Stock was $25 per share.
  • 4Initial dividend rate for Series I Preferred Stock is 3.36% per annum (3-month LIBOR + 1.5%).
  • 5Dividend rate on Series I Preferred Stock is subject to adjustment after September 30, 2002.
  • 6Series I Preferred Stock is redeemable at the company's election at any time.
  • 7Filing includes Articles Supplementary for the Series I Preferred Stock terms as an exhibit.

Frequently Asked Questions

While not explicitly stated, the redemption of Series C Preferred Stock, funded in part by the issuance of Series I Preferred Stock, suggests a strategic move to refinance or restructure the company's preferred equity obligations, potentially at more favorable terms or to simplify the capital structure.

The Series I Preferred Stock was sold at $25 per share with an initial annual dividend rate of 3.36% (calculated as three-month LIBOR plus 1.5%). This dividend rate is variable and subject to adjustment after September 30, 2002. The shares are also redeemable by AvalonBay at its discretion.

The filing states that the 592,000 shares of Series I Preferred Stock were sold to an 'institutional investor' in a private placement.

The sale of 592,000 shares at $25 per share generated $14.8 million in proceeds. This capital was used, in part, to fund the redemption of the Series C Preferred Stock.