8-KOther EventsExhibits & Filings

AVALONBAY COMMUNITIES INC 8-K Report, Corporate Update (May 11, 2016)

Filed May 11, 2016For Securities:AVB

Summary

AvalonBay Communities, Inc. (AVB) announced on May 4, 2016, that it priced a public offering of $475 million in aggregate principal amount of 2.95% Medium Term Notes due 2026. The offering, which settled on May 11, 2016, was conducted under the company's shelf registration statement and involved an established group of agents led by UBS Securities LLC and Morgan Stanley & Co. LLC. The net proceeds from this offering, estimated at approximately $471.2 million after fees, are intended for significant strategic uses. A primary allocation will be to reduce outstanding indebtedness under its $1.5 billion unsecured revolving credit facility, which has been utilized for repaying and refinancing other debt. The remaining proceeds are earmarked for general corporate purposes, including the acquisition, development, and redevelopment of apartment communities. Pending these uses, the funds may be temporarily invested in short-term, investment-grade instruments.

Key Highlights

  • 1AVB priced a $475 million public offering of 2.95% Medium Term Notes due 2026.
  • 2The offering settled on May 11, 2016.
  • 3Net proceeds are approximately $471.2 million after underwriting discounts and costs.
  • 4Proceeds will be used to reduce outstanding debt under its $1.5 billion unsecured revolving credit facility.
  • 5Funds may also be used for general corporate purposes, including acquisition and development of apartment communities.
  • 6Pending deployment, proceeds may be invested in short-term money market funds or investment grade securities.

Frequently Asked Questions

The primary purpose is to reduce outstanding indebtedness under AvalonBay's $1.5 billion unsecured revolving credit facility, which has been used for repaying and refinancing other debt. The remaining funds are for general corporate purposes, such as acquisitions and development.

The notes have a principal amount of $475 million, a coupon rate of 2.95%, and mature on May 11, 2026. Interest payments are semi-annual, occurring on May 15 and November 15, with the first payment on November 15, 2016.

The net proceeds, approximately $471.2 million, will first be applied to reduce the company's revolving credit facility. Any remaining funds are designated for general corporate purposes, which include acquiring, developing, and redeveloping apartment communities. Pending these uses, the funds may be invested in short-term, high-quality investments.

The notes are being used to reduce indebtedness under AvalonBay's $1.5 billion unsecured revolving credit facility. This facility itself has been used for repayment and refinancing of other existing indebtedness.