Summary
AvalonBay Communities, Inc. (AVB) announced on April 6, 2022, a forward sale of 2,000,000 shares of its common stock through agreements with Morgan Stanley and J.P. Morgan. The company will not receive immediate proceeds from this sale. Instead, it anticipates receiving cash proceeds by December 31, 2023, upon physical settlement of the forward sale agreements, with an initial forward price of $247.30 per share, subject to adjustments. The proceeds from this offering are earmarked for future land acquisitions, development and redevelopment of apartment communities, community acquisitions, and general corporate purposes. These general purposes may include the repayment of outstanding debt, such as under its commercial paper program or revolving credit facility. Investors should note that while the company expects to receive cash, there's a possibility of cash or share settlement, which could alter the net proceeds received or even result in obligations to the forward purchasers.
Key Highlights
- 1AVB entered into a forward sale agreement for 2,000,000 shares of common stock.
- 2The offering is being conducted through Morgan Stanley and J.P. Morgan as underwriters, forward sellers, and forward purchasers.
- 3The company will not receive proceeds upfront; expects cash by December 31, 2023, upon physical settlement.
- 4Initial forward price is set at $247.30 per share, subject to adjustments.
- 5Proceeds are intended for land acquisition, development, community acquisitions, and general corporate purposes, including debt repayment.
- 6There is a possibility of cash or net share settlement, which could impact net proceeds received by AVB.
- 7The offering is being made under an effective shelf registration statement on Form S-3.