American Homes 4 Rent Announces Pricing of Public Offering of $650 Million of 4.950% Senior Notes due 2030
Rhea-AI Summary
American Homes 4 Rent (NYSE: AMH) has announced the pricing of $650 million aggregate principal amount of 4.950% Senior Notes due 2030 through its operating partnership. The Notes will be issued at 99.444% of par value, with interest payable semi-annually on June 15 and December 15, starting December 15, 2025. The offering is expected to close around May 13, 2025.
The company plans to use the net proceeds to repay outstanding debts, including its revolving credit facility and 2015-SFR2 asset-backed securitization notes. Funds will also support general corporate purposes, including property acquisitions, developments, and portfolio improvements. Wells Fargo Securities, BofA Securities, Citigroup, and J.P. Morgan Securities are serving as joint book-running managers for the offering.
Positive
- Successful pricing of $650 million senior notes offering demonstrates strong market confidence
- Strategic debt refinancing opportunity through the new notes
- Funds will support property acquisitions and portfolio expansion
- Competitive interest rate of 4.950% in current market conditions
Negative
- Additional long-term debt obligation until 2030
- Slightly below par value issuance at 99.444%
- Increased interest expense with semi-annual payments
Insights
AMH's $650M notes offering at 4.950% reflects standard debt refinancing activity, potentially extending debt maturities while maintaining financial flexibility.
American Homes 4 Rent's pricing of
The primary use of proceeds – repayment of existing debt including their revolving credit facility and potentially their 2015-SFR2 asset-backed securitization notes – indicates a debt refinancing strategy rather than an expansion of total leverage. This approach typically aims to extend debt maturities and optimize the company's overall debt structure. By refinancing shorter-term or variable-rate debt with these 5-year fixed-rate notes, AMH can lock in their interest expense through 2030, creating greater financial predictability.
The secondary allocation for "general corporate purposes" including property acquisitions and developments suggests AMH is maintaining financial flexibility to pursue strategic growth opportunities in the single-family rental market. This balanced approach to capital allocation – addressing existing debt while preserving capacity for investments – aligns with prudent REIT financial management practices.
The impressive lineup of underwriters, led by major financial institutions including Wells Fargo, BofA Securities, Citigroup, and J.P. Morgan, demonstrates strong institutional support for this offering. This broad syndicate suggests healthy demand for AMH's debt, reflecting confidence in the company's credit profile and business model within the single-family rental sector.
Interest on the Notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing December 15, 2025. The Notes will mature on June 15, 2030. The offering is subject to the satisfaction of customary closing conditions and is expected to close on or about May 13, 2025.
The Operating Partnership intends to use the net proceeds from the offering for the repayment of outstanding indebtedness, which may include repayment of amounts outstanding on its revolving credit facility, repayment or voluntary prepayment of all or a portion of its outstanding 2015-SFR2 asset-backed securitization notes, as well as general corporate purposes, including, without limitation, property acquisitions and developments, the expansion, redevelopment and/or improvement of existing properties in the Company's portfolio, other capital expenditures, working capital and other general purposes.
Wells Fargo Securities, LLC, BofA Securities, Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are acting as joint book-running managers and representatives of the underwriters for the offering, and Mizuho Securities
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer or 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: Wells Fargo Securities, LLC, Attn: WFS Customer Service, 608 2nd Avenue South, Suite 1000,
About AMH
AMH (NYSE: AMH) is a leading large-scale integrated owner, operator and developer of single-family rental homes. We're an internally managed
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. Examples of forward-looking statements contained in this press release include, among others, the Operating Partnership's ability to complete the offering and the intended use of net proceeds. The Operating Partnership has based these forward-looking statements on its current expectations and assumptions about future events. While the Operating Partnership's management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Operating Partnership'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. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company or the Operating Partnership undertakes no obligation to update any forward-looking statements to conform to actual results or changes in their expectations, unless required by applicable law. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the Company in general, see the Company's and the Operating Partnership's Annual Report on Form 10-K for the year ended December 31, 2024, and in the Company's and the Operating Partnership's subsequent filings with the SEC.
AMH Contact:
Nicholas Fromm
Investor Relations
Phone: (855) 794-2447
Email: investors@amh.com
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SOURCE AMH
FAQ
What is the size and interest rate of AMH's new senior notes offering?
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How does American Homes 4 Rent plan to use the proceeds from the senior notes?
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What is the maturity date for AMH's newly issued senior notes?
