Item 8.01. Other Events.
Underwriting Agreement
On May 20, 2021, American Homes 4 Rent (the "Company") and American Homes 4
Rent, L.P., a Delaware limited partnership and the Company's operating
partnership (the "Operating Partnership"), entered into an Underwriting
Agreement (the "Underwriting Agreement") with J.P. Morgan Securities LLC and
BofA Securities, Inc., as representatives of the several underwriters listed on
Schedule I thereto (the "Underwriters"), J.P. Morgan Securities LLC (as agent
for JPMorgan Chase Bank, National Association) and BofA Securities, Inc. (as
agent for Bank of America, N.A.), as the forward sellers (the "Forward
Sellers"), and JPMorgan Chase Bank, National Association and Bank of America,
N.A., as the forward purchasers (the "Forward Purchasers"), pursuant to which
the Company agreed to offer and sell up to 18,745,000 of its Class A common
shares of beneficial interest, par value $0.01 per share (the "Class A common
shares"), consisting of (i) 5,500,000 Class A common shares offered directly by
the Company, and (ii) 13,245,000 Class A common shares offered on a forward
basis at the request of the Company by the Forward Sellers (including 2,445,000
Class A common shares pursuant to the Underwriters' option to purchase
additional shares from the Forward Sellers, which option was exercised in full),
in each case at a price of $35.28 per share (which is the public offering price
less the underwriting discount) (the "Offering"). The Offering is expected to
close on May 25, 2021, subject to customary closing conditions.
The Company and the Operating Partnership made certain customary
representations, warranties and covenants concerning the Company, the Operating
Partnership and the registration statement in the Underwriting Agreement and
also agreed to indemnify the Underwriters, the Forward Sellers and the Forward
Purchasers against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), or to contribute to
payments the Underwriters, the Forward Sellers and the Forward Purchasers may be
required to make in respect of those liabilities.
A copy of the Underwriting Agreement is attached to this Current Report on Form
8-K as Exhibit 1.1 and incorporated herein by reference. The summary set forth
above is qualified in its entirety by reference to Exhibit 1.1.
Forward Sale Agreements
In connection with the Offering, on May 20, 2021, the Company entered into
forward sale agreements with each Forward Purchaser (each an "Initial Forward
Sale Agreement") with respect to up to 13,245,000 Class A common shares to be
sold in the Offering (including up to 2,445,000 Class A common shares pursuant
to the Underwriters' option to purchase additional shares from the Forward
Sellers). In connection with the Underwriters' exercise in full of such option,
on May 21, 2021, the Company entered into additional forward sale agreements
with each Forward Purchaser (together with the Initial Forward Sale Agreements,
the "Forward Sale Agreements"). The Company expects to physically settle the
Forward Sale Agreements (by the delivery of the Class A common shares) and
receive proceeds, subject to certain adjustments, from the sale of such Class A
common shares by May 21, 2022, although the Company has the right to elect
settlement prior to that time subject to certain conditions. Although the
Company expects to settle the Forward Sale Agreements entirely by the physical
delivery of Class A common shares in exchange for cash proceeds, the Forward
Sale Agreements allow the Company to cash or net-share settle all or a portion
of its obligations under the Forward Sale Agreements. If the Company elects to
cash or net share settle the Forward Sale Agreements, the Company may not
receive any proceeds, and may owe cash or Class A common shares to the Forward
Purchasers in certain circumstances. The Forward Sale Agreements provide for an
initial forward sale price of $35.28 per share (which is the public offering
price less the underwriting discount), subject to certain adjustments pursuant
to the terms of the Forward Sale Agreements. The Forward Sale Agreements are
subject to early termination or settlement under certain circumstances.
The Company will not initially receive any proceeds from the sale of Class A
common shares by the Forward Sellers.
Copies of the Forward Sale Agreements are attached to this Current Report on
Form 8-K as Exhibit 1.2 and Exhibit 1.3 and incorporated herein by reference.
The summary set forth above is qualified in its entirety by reference to Exhibit
1.2 and Exhibit 1.3.
The Offering was made pursuant to an automatic shelf registration statement
filed with the Securities and Exchange Commission on June 17, 2020 (File
No. 333-239227), a base prospectus, dated June 17, 2020, included as part of the
registration statement, and a prospectus supplement, dated May 20, 2021, filed
with the Securities and Exchange Commission pursuant to Rule 424(b) under the
Securities Act.
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The Company expects to receive net proceeds from the sale and settlement of the
Class A common shares in the Offering (including from settlement of the Forward
Sale Agreements), after deducting related underwriting discounts and commissions
and estimated expenses, of approximately $661.1 million (including proceeds from
the shares sold pursuant to the Underwriters' option to purchase additional
shares). The Company intends to use the net proceeds from the Offering (i) to
repay indebtedness the Company has incurred or expects to incur under its
revolving credit facility, (ii) to partially fund the previously announced
redemption of $268.8 million aggregate principal amount of its Series D
Cumulative Redeemable Perpetual Preferred Shares on June 7, 2021 and
$230.0 million aggregate principal amount of its Series E Cumulative Redeemable
Perpetual Preferred Shares on June 30, 2021, and (iii) for general corporate
purposes. The foregoing application may be effected through the Operating
Partnership by the Company contributing a portion of the net proceeds to the
Operating Partnership in exchange for Class A partnership units.
The Underwriters, the Forward Purchasers and the Forward Sellers, and their
respective affiliates, have engaged in, and may in the future engage in,
investment banking, commercial banking and other commercial dealings in the
ordinary course of business with the Company or its affiliates, for which they
have received and may continue to receive customary fees and commissions.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
1.1 Underwriting Agreement, dated May 20, 2021, by and among the
Company, the Operating Partnership, J.P Morgan Securities LLC and BofA
Securities, Inc., as representatives of the several underwriters
listed on Schedule I thereto, and J.P. Morgan Securities LLC (as agent
for JPMorgan Chase Bank, National Association) and BofA Securities,
Inc. (as agent for Bank of America, N.A.), as the forward sellers, and
JPMorgan Chase Bank, National Association and Bank of America, N.A.,
as the forward purchasers.
1.2 Forward Sale Agreement, dated May 20, 2021, between the Company and
JPMorgan Chase Bank, National Association.
1.3 Forward Sale Agreement, dated May 20, 2021, between the Company and
Bank of America, N.A.
5.1 Opinion of Hogan Lovells US LLP regarding the legality of the
Class A common shares.
23.1 Consent of Hogan Lovells US LLP (included in Exhibit 5.1).
104 Cover Page Interactive Data File (embedded within the Inline XBRL
documents).
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