Post Properties, Inc. (PPS), a real estate investment trust (REIT), has recently sold over 4 million common shares at $17.75 each. Although the equity financing provided the much-needed cash to repay some of its outstanding debt, the move could potentially dilute earnings.
Post Properties expects to raise net proceeds of $68 million, after deducting the underwriting discount and other expenses associated with the public offering. The company intends to utilize the cash to repay mortgage debt of approximately $39.4 million related to the Post Fallsgrove apartment property in Rockville, Maryland. Post Properties would also have to pay $4 million as prepayment penalty for early repayment of the debt.
Post Properties will use the remaining proceeds from the offering for general corporate purposes. These include funding for the development pipeline of the company and the repurchase of senior unsecured notes.
Headquartered in Atlanta, Georgia, Post Properties develops and operates luxury multi-family apartment communities under the renowned Post brand since its formation in 1971. As of Jun 30, 2009, the company owned 19,864 apartment units in 55 communities. The company is also developing 362 for-sale condominium homes and converting 349 additional units into products-for-sale.
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