Invitation Homes Inc. (NYSE: INVH) ("Invitation Homes" or the "Company") today announced that the Company has notified holders of its 3.50% convertible senior notes due 2022 (the “Notes”) of the Company’s intent to settle conversions of the Notes with common stock. The Notes mature on January 15, 2022, and have a par value of $345 million.

For holders electing conversion on or before January 15, 2022, the Notes will be exchanged for common stock according to a prescribed conversion ratio. As of June 30, 2021, the conversion ratio was 43.9448 shares per $1,000 principal amount of Notes. The actual conversion ratio is subject to adjustment through the date of maturity for cash dividends paid to common stockholders and other potential transactions and certain circumstances.

Assuming the June 30, 2021, conversion ratio of 43.9448 shares per $1,000 principal amount of Notes, settlement of the $345 million (par value) of Notes would result in the issuance of approximately 15 million common shares and a reduction in cash interest expense of approximately $12 million on an annualized basis.

On a pro forma basis, whereby net debt is reduced for the impact of the conversion of the Notes, net debt / Trailing Twelve Months Adjusted EBITDAre at March 31, 2021, would have been 6.8x versus 7.1x as reported by the Company in its first quarter 2021 Earnings Release and Supplemental Information.

Reconciliation of Net Debt / Trailing Twelve Months Adjusted EBITDAre

(in thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

3/31/21

 

Pro Forma

 

3/31/21

 

 

 

As Reported

 

Adjustments(1)

 

Pro Forma

 

Mortgage loans, net

 

$

4,808,085

 

 

 

$

—

 

 

 

$

4,808,085

 

 

 

Secured term loan, net

 

401,149

 

 

 

—

 

 

 

401,149

 

 

 

Term loan facility, net

 

2,472,718

 

 

 

—

 

 

 

2,472,718

 

 

 

Convertible senior notes, net

 

340,730

 

 

 

(340,730

)

 

 

—

 

 

 

Total Debt per Balance Sheet

 

8,022,682

 

 

 

(340,730

)

 

 

7,681,952

 

 

 

Retained and repurchased certificates

 

(246,798

)

 

 

—

 

 

 

(246,798

)

 

 

Cash, ex-security deposits and letters of credit

 

(247,041

)

 

 

—

 

 

 

(247,041

)

 

 

Deferred financing costs, net

 

40,610

 

 

 

—

 

 

 

40,610

 

 

 

Unamortized discounts on notes payable

 

6,471

 

 

 

(4,270

)

 

 

2,201

 

 

 

Net Debt (A)

 

$

7,575,924

 

 

 

$

(345,000

)

 

 

$

7,230,924

 

 

 

 

 

 

 

 

 

 

 

 

 

Trailing Twelve Months (TTM) Ended

 

 

 

3/31/21

 

Pro Forma

 

3/31/21

 

 

 

As Reported

 

Adjustments

 

Pro Forma

 

Net income available to common stockholders(2)

 

$

203,182

 

 

 

$

17,246

 

 

 

$

220,428

 

 

 

Net income available to participating securities

 

441

 

 

 

—

 

 

 

441

 

 

 

Non-controlling interests

 

1,272

 

 

 

—

 

 

 

1,272

 

 

 

Interest expense

 

352,572

 

 

 

(17,246

)

 

 

335,326

 

 

 

Interest expense in unconsolidated joint ventures

 

74

 

 

 

—

 

 

 

74

 

 

 

Depreciation and amortization

 

562,004

 

 

 

—

 

 

 

562,004

 

 

 

Depreciation and amortization of real estate assets in unconsolidated joint ventures

 

104

 

 

 

—

 

 

 

104

 

 

 

EBITDA

 

1,119,649

 

 

 

—

 

 

 

1,119,649

 

 

 

Gain on sale of property, net of tax

 

(53,878

)

 

 

—

 

 

 

(53,878

)

 

 

Impairment on depreciated real estate investments

 

2,538

 

 

 

—

 

 

 

2,538

 

 

 

Net gain on sale of investments in unconsolidated joint ventures

 

(336

)

 

 

—

 

 

 

(336

)

 

 

EBITDAre

 

1,067,973

 

 

 

—

 

 

 

1,067,973

 

 

 

Share-based compensation expense

 

18,803

 

 

 

—

 

 

 

18,803

 

 

 

Severance

 

715

 

 

 

—

 

 

 

715

 

 

 

Casualty (gains) losses, net

 

(4,613

)

 

 

—

 

 

 

(4,613

)

 

 

Unrealized (gains) losses on investments in equity securities

 

(26,549

)

 

 

—

 

 

 

(26,549

)

 

 

Other, net

 

3,536

 

 

 

—

 

 

 

3,536

 

 

 

Adjusted EBITDAre (B)

 

1,059,865

 

 

 

$

—

 

 

 

$

1,059,865

 

 

 

 

 

 

 

 

 

 

 

Net debt / TTM Adjusted EBITDAre (A/B)

 

7.1

 

x

 

 

 

6.8

 

x

 

 

 

 

 

 

 

 

 

  1. Does not include adjustments for refinancing or voluntary prepayments of securitized loans after 3/31/2021.
  2. Pro forma adjustment for $17,246 of interest expense associated with the Notes for TTM ended 3/31/2021 includes $5,171 of non-cash amortization of fair value discount. Cash interest expense associated with the Notes for TTM ended 3/31/2021 was $12,075.

About Invitation Homes:

Invitation Homes is the nation's premier single-family home leasing company, meeting changing lifestyle demands by providing access to high-quality, updated homes with valued features such as close proximity to jobs and access to good schools. The company's mission, "Together with you, we make a house a home," reflects its commitment to providing homes where individuals and families can thrive and high-touch service that continuously enhances residents' living experiences.