Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

American Homes 4 Rent prices $600M green bond offering

Published 24/01/2024, 10:38 am
© Reuters.
AMH
-

LAS VEGAS - American Homes 4 Rent (NYSE: NYSE:AMH), a real estate investment trust specializing in single-family rental homes, has priced a $600 million green bond offering through its operating partnership, American Homes 4 Rent, L.P. The senior notes carry a 5.5% interest rate and are set to mature on February 1, 2034, with the first interest payment due on August 1, 2024.

The notes were priced at 99.89% of their par value, and the offering is expected to close around January 30, 2024, contingent on standard closing conditions. Proceeds from the bond sale are earmarked for financing or refinancing projects that meet certain environmental criteria, as outlined in the prospectus supplement for the offering.

Until the proceeds are fully allocated to these eligible projects, the operating partnership plans to use the funds for repaying outstanding debt. This may include repaying or voluntarily prepaying portions of the outstanding 2014-SFR2 and 2014-SFR3 asset-backed securitization notes. Alternatively, the proceeds may be temporarily invested following the company's cash investment policy.

This inaugural green bond issuance underscores American Homes 4 Rent's commitment to energy efficiency and sustainable building practices, which contribute to addressing the shortage in the U.S. housing market.

The joint book-running managers for the offering include Wells Fargo (NYSE:WFC) Securities, BofA Securities, and J.P. Morgan, with additional book-running managers and co-managers comprising several other financial institutions.

InvestingPro Insights

As American Homes 4 Rent (NYSE: AMH) ventures into sustainable finance with its $600 million green bond offering, the company's financial health and market performance remain a focal point for investors. According to real-time metrics from InvestingPro, American Homes 4 Rent has a market capitalization of $14.67 billion and is trading at a P/E ratio of 33.77, with a higher adjusted P/E ratio over the last twelve months as of Q3 2023, standing at 74.27. This indicates a premium valuation that investors are willing to pay for the company's earnings.

InvestingPro Tips reveal that American Homes 4 Rent has been trading near its 52-week high, which could suggest strong market confidence or potential overvaluation depending on broader market conditions. The company's liquid assets surpassing short-term obligations is a reassuring sign of financial stability, especially as it embarks on new environmental initiatives funded by the green bond proceeds. Moreover, the fact that the company has raised its dividend for 3 consecutive years, coupled with a dividend yield of 2.43%, may appeal to income-focused investors.

For those considering an in-depth analysis, there are additional InvestingPro Tips available for American Homes 4 Rent, which can be found at InvestingPro. To enhance your investment strategy, consider subscribing to InvestingPro, now on a special New Year sale with discounts of up to 50%. Use coupon code SFY24 for an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 for an additional 10% off a 1-year InvestingPro+ subscription. With this subscription, gain access to a comprehensive list of tips and metrics that provide a deeper understanding of the company's financial position and market performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.