Summary
Equity Residential (EQR) announced a new Distribution Agreement on June 6, 2019, establishing an "at the market" (ATM) offering program for up to 13,000,000 common shares. This program allows the company to sell shares opportunistically through a syndicate of agents, including major financial institutions. The shares will be issued under a prospectus supplement filed on the same day and an automatic shelf registration statement filed on June 5, 2019, replacing an expiring registration. This initiative provides EQR with flexibility to raise capital as needed in the public markets.
Key Highlights
- 1Equity Residential has entered into a Distribution Agreement to conduct an "at the market" (ATM) offering of up to 13,000,000 common shares.
- 2The ATM program involves a syndicate of prominent financial institutions acting as Agents, Forward Sellers, and/or Forward Purchasers.
- 3The offering allows for the issuance of shares directly or through forward sale agreements, providing flexibility in capital raising.
- 4Proceeds from direct sales will be received by the Company, while forward sales involve borrowing and subsequent physical or cash/net share settlement.
- 5Commissions for sales agents and forward sellers are capped at 2.0% of the gross sales price.
- 6The company also maintains a separate share repurchase program with authorization for up to 13 million shares.
- 7The new ATM program is established under a recently filed automatic shelf registration statement and a new prospectus supplement.
Frequently Asked Questions
The Distribution Agreement establishes an "at the market" (ATM) offering program that allows Equity Residential to issue and sell up to 13,000,000 common shares opportunistically in the public market. This provides the company with a flexible way to raise capital.
Under the ATM program, Equity Residential can sell shares directly through agents, receiving proceeds immediately. Alternatively, the company can enter into forward sale agreements. In a forward sale, the company receives cash proceeds at a future settlement date (typically physical settlement), or may elect for cash or net share settlement, which could result in no immediate proceeds from the issuance of shares.
The Distribution Agreement allows for the issuance and sale of up to 13,000,000 common shares. The total capital raised will depend on the market price of the shares at the time of sale and whether the company chooses direct sales or forward sale agreements.
Yes, Equity Residential will pay commissions to the Agents for shares sold directly, not exceeding 2.0% of the gross sales price. For forward sales, commissions are paid to the Forward Seller, also not exceeding 2.0% of the gross sales price of borrowed shares, typically reflected as a reduced initial forward sale price.