Giant Single Family Residence REIT American Homes 4 Rent Sells a Preferred
By: Tim McPartland,
Only 1 month after selling a cumulative, redeemable preferred offering with a coupon of 6.50% American Homes 4 Rent (NYSE:AMH) is back with another offering with a slightly lower coupon of 6.35%.
AMH is the giant of the single family residence REIT marketplace with ownership of over 47,000 houses. It really isn’t a surprise that AMH is a giant in the industry as one of the founders, B Wayne Hughes, founded giant storage REIT Public Storage (NYSE:PSA) as well as REIT Public Storage Business Parks (NYSE:PSB). Mr. Hughes is currently Chairman of the Board of American Homes 4 Rent.
This new offering is for 8,000,000 shares with an additional 1,200,000 available for over allotments. The total proceeds to the company, after offering expenses, will be in the neighborhood of $223,000,000. Proceeds are to be used to pay down the company’s revolving debt facility and for general corporate purposes.
This issue has the normal terms for REIT issues–redeemable in about 5 years and cumulative in respect to dividends.
AMH has 4 other preferred stock issues outstanding, although 3 of these issues are “participating” preferreds, meaning the owners of the shares “participate” in any price appreciation of the houses that the company owns. You can compare the issues on our “Swaps” page found here. Be aware that the A, B and C issues accrue the house price appreciation portion of the dividend in the share price as it is paid only after the issue has been outstanding for approximately 7 years. Because of this the A, B and C issues are NOT directly comparable to the D and E issues.
The new issue is now trading on the OTC Grey market under the temporary ticker symbol AHMRP and last traded at $24.90/share. Further information on trading on the OTC Grey market can be found here.
Further details of the offering can be found here.