Summary
AvalonBay Communities, Inc. (AVB) announced on May 6, 2019, the execution of new sales agency financing agreements and master forward sale confirmations. These agreements allow the company to offer and sell up to $1 billion of its common stock from time to time through an expanded group of sales agents. This move updates and increases the offering capacity compared to prior agreements from December 2015. The company has also entered into forward sale agreements, which involve a mechanism where forward purchasers borrow and sell AVB's shares, with AVB expecting to settle these agreements later. This flexible financing structure allows AVB to manage its capital needs, potentially receiving proceeds from stock sales over time, while also providing avenues for debt-like financing through forward sales. The sales agents will offer shares at prevailing market prices, with commissions not exceeding 1.50% of the sales price.
Key Highlights
- 1AVB entered into new sales agency financing agreements with multiple financial institutions, including J.P. Morgan, Barclays, and Goldman Sachs.
- 2The company has the flexibility to offer and sell up to $1,000,000,000 of its common stock through these agreements.
- 3New agreements replace and expand upon prior arrangements from December 2015, updating the group of sales agents.
- 4AVB can utilize forward sale agreements, allowing forward purchasers to borrow and sell AVB shares.
- 5The company expects to receive net cash proceeds from the eventual settlement of forward sale agreements, although cash or share settlements are also possible.
- 6Commissions paid to sales agents and forward sellers will not exceed 1.50% of the sales price.
- 7Shares will be offered at prevailing market prices at the time of sale.