8-KMaterial Agreements

AVALONBAY COMMUNITIES INC 8-K Report, Material Agreement (Aug 17, 2010)

Filed August 17, 2010For Securities:AVB

Summary

AvalonBay Communities, Inc. (AVB) has reported under Form 8-K that on August 16, 2010, the company exercised an option to extend its Second Amended and Restated Revolving Loan Agreement, originally dated November 14, 2006. This extension provides an additional year to the maturity date of the Credit Facility, which is a significant source of liquidity for the company. The agreement involves several major financial institutions as lenders, including JP Morgan Chase, Bank of America, Morgan Stanley, Wells Fargo, and Deutsche Bank. This proactive measure demonstrates prudent financial management by AvalonBay, securing its access to credit for an extended period. The extension is accompanied by a customary extension fee, amounting to 0.10% of the facility's value, or $1,000,000. This action is crucial for maintaining operational flexibility and supporting ongoing development and acquisition strategies in the real estate investment trust (REIT) sector.

Key Highlights

  • 1AvalonBay Communities, Inc. extended its revolving credit facility by one year.
  • 2The extension pertains to the Second Amended and Restated Revolving Loan Agreement dated November 14, 2006.
  • 3The company exercised an option available under Section 2.18 of the Credit Facility.
  • 4A $1,000,000 extension fee (0.10%) was paid for this one-year extension.
  • 5Key lenders involved include JP Morgan Chase, Bank of America, Morgan Stanley, Wells Fargo, and Deutsche Bank.
  • 6This action secures continued access to a material source of liquidity for the company.
  • 7The filing date of this report was August 17, 2010, with the event occurring on August 16, 2010.

Frequently Asked Questions

The primary purpose of this Form 8-K filing is to report that AvalonBay Communities, Inc. exercised its option to extend the maturity date of its Second Amended and Restated Revolving Loan Agreement by one year.

The extension secures continued access to a significant source of revolving credit, providing liquidity for the company's operations, development, and potential acquisitions. While it incurred a $1,000,000 fee, this is a standard cost for maintaining access to credit lines.

The credit facility involves AvalonBay Communities, Inc. as the borrower and a syndicate of major financial institutions as lenders, including JP Morgan Chase, Bank of America, Morgan Stanley, Wells Fargo, and Deutsche Bank, among others.

The filing specifically mentions the extension of the maturity date by one year and the payment of an extension fee. It does not indicate any other changes to the terms of the credit facility in this report.