Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

In order to pay off outstanding debt, AvalonBay Communities Inc. (AVB - Analyst Report) is raising capital through notes issuance. The company priced 3.625% unsecured notes worth $400 million at 99.728% of the principal amount. From the offering, it expects to reap around $396.2 million, inclusive of estimated issuance costs.

Notably, this apartment real estate investment trust (REIT) intends to utilize the proceeds to pay off outstanding debt under its unsecured revolving credit facility worth $1.3 billion. The remaining amount will likely be used to fulfill other corporate needs such as acquisition, development and redevelopment of apartment assets and reducing and refinancing other debts.

The unsecured notes will mature on Oct 1, 2020 and have a yield to maturity of 3.669%. The interest on the notes will be paid semi-annually on Apr 1 and Oct 1. The first payment will be made on Apr 1, 2014. Notably, the settlement is slated to complete by Sep 20, 2013.

As a matter of fact, Deutsche Bank of Deutsche Bank AG (DB - Analyst Report), Morgan Stanley (MS - Analyst Report) and UBS Investment Bank of UBS AG (UBS - Analyst Report) supported AvalonBay in this offering as lead representatives of the agents.

As of Jun 30, 2013, AvalonBay had $142.0 million outstanding under its $1.3 billion unsecured credit facility. The company had nearly $205.2 in cash, restricted cash, and cash in escrow as of that date.

We believe that the above-mentioned transaction is strategic fit as it will lower AvalonBay’s debt and thereby interest expenses as well. Moreover, increased financial flexibility will enable AvalonBay to pursue strong portfolio restructuring activity that will go a long way in enhancing top-line growth.

AvalonBay currently carries a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%