American Campus Communities Inc. (ACC) announced the initiation of an at-the-market equity program on Thursday. Under the program, the company will be entitled to sell common stock with an aggregate offering price of up to $150 million on a discretionary basis.
Bank of America (BAC), JPMorgan Securities Inc., a division of JPMorgan Chase & Co. (JPM) and KeyBanc Capital Markets Inc., a wing of KeyCorp (KEY) will act as sales agents or principals of this offering.
The program differs from a customary stock offering when compared on the basis of cost effectiveness.
The company is expected to use the proceeds from the sales for working capital, debt reduction and general corporate purposes, including potential acquisitions or new development projects.
The company has filed a registration statement including a prospectus and a prospectus supplement with the Securities and Exchange Commission (SEC) for the offering of the common stock under at-the-market equity program.
If any sales of common stock are made under the program, it would be through ordinary brokers’ transactions, including those on the New York Stock Exchange, at market prices or as otherwise agreed with the agents.
At the end of first quarter 2010, ACC had secured mortgage, construction and bond debt of $974.0 million, which is expected to decrease after common stock sales.
In March 2010, a Fidelity joint venture, in which ACC owns 10% interest, assigned its ownership interest in the University Heights property to the company. This property, serving students attending the University of Alabama at Birmingham, is wholly-owned by ACC. These two new properties contributed an additional $3.7 million to total revenues.
In May 2009, ACC closed a 9.8 million common stock offering, raising $198.7 million. In 2008, it raised more than $252.0 million by issuing 9.2 million shares and in 2007 it generated $98.7 million from a 3.5 million share offering.
The company’s closest competitor Education Realty Trust Inc. (EDR) issued 50,000 shares of restricted common stock to an executive as an inducement to enter into an employment agreement with the Trust in January 2010.
In first-quarter 2010, ACC reported $2.2 million net loss on $81.5 million revenue versus $0.3 million net gain on $75.7 million revenue in the year-earlier period.
ACC, one of the nation’s largest developers, owners and managers of high-quality student housing properties owns 86 owned properties, participates in 21 joint ventures and manages 137 student living facilities. At the end of March 2010, assets totaled $2.15 billion.
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