American Homes 4 Rent Announces Pricing of Public Offering of Common Shares

Rhea-AI Summary

American Homes 4 Rent (NYSE: AMH) announced a public offering of 20,000,000 Class A common shares, priced for $783 million in gross proceeds. Of this, 10,000,000 shares are provided directly by the Company, while the remaining are from forward purchasers. The offering includes a 30-day option for underwriters to buy an additional 3,000,000 shares. Proceeds will be used mainly for debt repayment, property development, and renovations. The transaction is expected to close on January 24, 2022, with proceeds anticipated by January 20, 2023.

Positive

• Expected gross proceeds of approximately $783 million will strengthen the company's financial position.
• Funds will be utilized for debt repayment, development of new properties, and renovations, aligning with the growth strategy.

Negative

• Issuing 20,000,000 shares may lead to shareholder dilution.
• Market response to stock offerings can be negative, potentially affecting share price.

CALABASAS, Calif., Jan. 19, 2022 /PRNewswire/ -- American Homes 4 Rent (NYSE: AMH) (the "Company") today announced that it has priced an underwritten public offering of 20,000,000 of its Class A common shares of beneficial interest, $0.01 par value per share ("Class A common shares"), of which 10,000,000 shares were offered directly by the Company, and 10,000,000 shares were offered, at the request of the Company, by the forward purchasers (as defined below) or their respective affiliates in connection with the forward sale agreements described below. The underwriters have been granted a 30-day option to purchase an aggregate of up to an additional 3,000,000 Class A common shares. The offering is subject to customary closing conditions and is expected to close on or about January 24, 2022.

In connection with the offering of the Class A common shares, the Company expects to enter into a forward sale agreement with each of Bank of America, N.A. and JPMorgan Chase Bank, National Association or their respective affiliates (who are referred to in such capacity individually as a "forward purchaser" and collectively, the "forward purchasers"), with respect to 10,000,000 Class A common shares covered by the offering. The forward purchasers or their respective affiliates are expected to borrow from third parties and sell to the underwriters 10,000,000 Class A common shares in connection with the forward sale agreements (or an aggregate of 13,000,000 shares if the underwriters exercise their option to purchase additional shares in full).

Pursuant to the terms of the forward sale agreements, and subject to the Company's right to elect cash or net share settlement under the forward sale agreements, the Company intends to issue and sell, upon physical settlement of such forward sale agreements, 10,000,000 Class A common shares to the forward purchasers (or an aggregate of 13,000,000 shares if the underwriters exercise their option to purchase additional shares in full) in exchange for cash proceeds per share equal to the applicable forward sale price per share, which will initially be the public offering price per share in the offering, less underwriting discounts and commissions, and will be subject to certain adjustments as provided for in the forward sale agreements. The Company expects to physically settle the forward sale agreements in full and receive proceeds by January 20, 2023.

The Company will receive proceeds from the sale of the Class A common shares offered by it in the offering, but will not initially receive any proceeds from the sale of the Class A common shares offered by the forward purchasers or their respective affiliates to the underwriters, except in certain circumstances described in the prospectus supplement relating to the offering. The Company estimates that gross proceeds to it, before deducting underwriting discounts and commissions and other estimated offering expenses, will be approximately $783.0 million, assuming full physical settlement of the forward sale agreement and excluding the option to purchase additional shares.

The Company intends to use the net proceeds from the offering (i) to repay indebtedness it has incurred or expects to incur under its revolving credit facility, (ii) to develop new single-family properties and communities, (iii) to acquire and renovate single-family properties and for related activities in accordance with its business strategy and (iv) for general corporate purposes.

BofA Securities, J.P. Morgan, Citigroup and Morgan Stanley are acting as joint book-running managers for the offering, and Wells Fargo Securities, Raymond James, BMO Capital Markets, Jefferies and Mizuho Securities are acting as book-running managers for the offering. BTIG, RBC Capital Markets, Regions Securities LLC, Ramirez & Co., Inc., and Scotiabank are acting as co-managers for the offering.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful before registration or qualification thereof under the securities laws of any such state or jurisdiction.

The offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (the "SEC") and only by means of a prospectus and prospectus supplement. Copies of the preliminary prospectus supplement relating to the offering and the final prospectus supplement, when available, may be obtained by visiting EDGAR on the SEC's website at www.sec.gov or from BofA Securities, Inc., NC1-004-03-43, 200 North College Street, 3rd Floor, Charlotte, NC 28255-0001, Attn: Prospectus Department or by email at dg.prospectus_requests@bofa.com; J.P. Morgan Securities LLC, Attn: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at 1-866-803-9204 or by email at prospectus-eq_fi@jpmchase.com; Citigroup, Attn: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at 800-831-9146 or by email at prospectus@citi.com; or Morgan Stanley & Co. LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014.

About American Homes 4 Rent

American Homes 4 Rent (NYSE: AMH) is a leader in the single-family home rental industry and "American Homes 4 Rent" is a nationally recognized brand for rental homes, known for high-quality, good value and resident satisfaction. We are an internally managed Maryland real estate investment trust, or REIT, focused on acquiring, developing, renovating, leasing, and operating attractive, single-family homes as rental properties. As of September 30, 2021, we owned 56,077 single-family properties in selected submarkets in 22 states.

Forward-Looking Statements

This press release contains "forward-looking statements" that relate to beliefs, expectations or intentions and similar statements concerning matters that are not of historical fact and are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "intend," "potential," "plan," "goal," "outlook," "guidance" or other words that convey the uncertainty of future events or outcomes. These forward-looking statements may include, but are not limited to, the Company's ability to complete the offering and the intended use of net proceeds. The Company has based these forward-looking statements on its current expectations and assumptions about future events. While the Company's management considers these expectations to be reasonable, they are inherently subject to risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control and could cause actual results to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. These and other important factors, including "Risk Factors" disclosed in, or incorporated by reference into, the prospectus from the Company's Annual Report on Form 10-K for the year ended December 31, 2020 and our Quarterly Reports on Form 10-Q for the three months ended March 31, 2021, June 30, 2021 and September 30, 2021, and in the Company's subsequent filings with the SEC, may cause the Company's actual results to differ materially from anticipated results expressed or implied by these forward-looking statements. Investors should not place undue reliance on these forward-looking statements.

Contact:
American Homes 4 Rent
Investor Relations
Phone: (855) 794-2447
Email: investors@ah4r.com

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SOURCE American Homes 4 Rent

FAQ

What is the size of the public offering by AMH?

American Homes 4 Rent is offering 20,000,000 Class A common shares.

When is the expected closing date for AMH's public offering?

The closing date is expected to be on January 24, 2022.

How much gross proceeds is AMH expecting from the offering?

The expected gross proceeds are approximately $783 million.

What will AMH use the proceeds from the offering for?

The proceeds will be used for debt repayment, property development, and renovations.

What is the potential impact of the stock offering on AMH shareholders?

The offering may lead to shareholder dilution which could negatively impact existing shareholders.