CLEVELAND, May 29, 2013 /PRNewswire/ -- Associated Estates Realty Corporation (NYSE: AEC, NASDAQ: AEC) ("Associated Estates" or "the Company") today announced that is has priced a public offering of 6,500,000 of its common shares at a price of $17.25 per share, all of which are being offered in connection with the forward sale agreements described below. Associated Estates also granted the underwriters a 30-day option to purchase up to an additional 975,000 of its common shares. The offering is expected to close on or about June 3, 2013, subject to customary closing conditions.
Citigroup, BofA Merrill Lynch and Wells Fargo Securities served as joint book-running managers for the offering. Jefferies and Raymond James served as co-lead managers for the offering. Barclays, Cantor Fitzgerald & Co., Sandler O'Neill + Partners, L.P., Compass Point Research & Trading, LLC and RBS Securities Inc. served as co-managers for the offering.
Associated Estates expects to use the net proceeds received from the forward equity sale to repay debt that is scheduled to mature on October 1, 2013 and for general corporate purposes.
In connection with the offering of its common shares, Associated Estates has entered into forward sale agreements with Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, or their respective affiliates (which are referred to as the forward purchasers) with respect to 6,500,000 of its common shares. The forward purchasers are expected to borrow and sell 6,500,000 common shares of Associated Estates in aggregate. Pursuant to the terms of the forward sale agreements, and subject to its right to elect cash or net share settlement, Associated Estates intends to sell, upon physical settlement of such forward sale agreements, an aggregate of 6,500,000 of its common shares to the forward purchasers. If the option is exercised, the number of common shares underlying the forward sale agreements is expected to be increased in respect of the number of common shares that are subject to the exercise of the option.
Settlement of the forward sale agreements will occur no later than October 1, 2013.
A copy of the final prospectus supplement and accompanying prospectus relating to the offering may be obtained, when available, from: Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: (800) 831-9146; BofA Merrill Lynch, 222 Broadway, New York, NY 10038, Attn: Prospectus Department, email: email@example.com; or Wells Fargo Securities, 375 Park Avenue, New York, NY 10152, Attention: Equity Syndicate Dept., telephone: (800) 326-5897 or e-mail: firstname.lastname@example.org.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state. The offering may be made only by means of a prospectus and related prospectus supplement forming part of the effective shelf registration statement.
Associated Estates is a real estate investment trust ("REIT") and is a member of the Russell 2000 and the MSCI US REIT Indices. The Company is headquartered in Richmond Heights, Ohio. Associated Estates' portfolio consists of 51 properties containing 13,107 units located in ten states.
Safe Harbor Statement
This news release contains forward-looking statements based on current judgments and knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to vary from those projected. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. These forward-looking statements are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "expects," "projects," "believes," "plans," "anticipates" and similar expressions are intended to identify forward-looking statements. Investors are cautioned that the Company's forward-looking statements involve risks and uncertainties that could cause actual results to differ from estimates or projections contained in these forward-looking statements, including without limitation the following: changes in the economic climate in the markets in which the Company owns and manages properties, including interest rates, the overall level of economic activity, the availability of consumer credit and mortgage financing, unemployment rates and other factors; elimination of, or limitations on, federal government support for Fannie Mae and/or Freddie Mac that might result in significantly reduced availability of mortgage financing sources, as well as increases in interest rates for mortgage financing; the ability of the Company to refinance debt on favorable terms at maturity; risks of a lessening of demand for the multifamily units owned by the Company; competition from other available multifamily units, single family units available for rental or purchase, and changes in market rental rates; the failure of development projects or redevelopment activities to achieve expected results due to, among other causes, construction and contracting risks, unanticipated increases in materials and/or labor, and delays in project completion and/or lease-up that result in increased costs and/or reduce the profitability of a completed project; the failure of the Company to enter into development joint venture arrangements on acceptable terms; increases in property and liability insurance costs; unanticipated increases in real estate taxes and other operating expenses; weather conditions that adversely affect operating expenses; expenditures that cannot be anticipated such as utility rate and usage increases and unanticipated repairs; inability of the Company to control operating expenses or achieve increases in revenue; shareholder ownership limitations that may discourage a takeover otherwise considered favorable by shareholders; the results of litigation filed or to be filed against the Company; changes in tax legislation; risks of personal injury claims and property damage that are not covered by the Company's insurance; catastrophic property damage losses that are not covered by the Company's insurance; the inability to acquire properties at prices consistent with the Company's investment criteria; risks associated with property acquisitions such as failure to achieve expected results or matters not discovered in due diligence; risks related to the perception of residents and prospective residents as to the attractiveness, convenience and safety of the Company's properties or the neighborhoods in which they are located; and other uncertainties and risk factors addressed in documents filed by the Company with the Securities and Exchange Commission, including, without limitation, the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q.
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SOURCE Associated Estates Realty Corporation