AIR issues $400 million senior unsecured notes


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DENVER–(BUSINESS WIRE)–Apartment Income REIT Corp. (“AIR”) (NYSE: AIRC) today announced the issuance of three tranches of unsecured senior secured notes, aggregating $400 million at a weighted average effective interest rate of 4.3% , including a previously placed cash lock and a weighted average maturity of eight years. Specifically, AIR issued:

  • $100 million of five-year notes at a stated interest rate of 4.58%;

  • $100 million of seven-year notes at a stated interest rate of 4.77%; and

  • $200 million ten-year notes at a stated interest rate of 4.84%.

The proceeds of the offering were used to repay borrowings under the revolving credit facility.

The private placement of unsecured notes is an important step in AIR’s transition from a secured borrower to a primarily unsecured borrower.

In addition, on June 21, 2022, AIR received $400 million from Apartment Investment and Management Company (“Aimco”) representing the partial prepayment of the $534 million note due to AIR and a pro rata share of the prepayment penalty. The proceeds were used to repay $350 million of term loans and to reduce borrowings under the revolving credit facility. AIR expects the loan balance to be repaid by September 30, 2022.

Given the placement of the senior unsecured notes and the prepayment of the $534 million note owed by Aimco, AIR will have outstanding, at sharing, (i) $1.6 billion of ownership level debt secured and (ii) $1.2 billion of fixed rate debt, unsecured debt consisting of $400 million of privately placed unsecured fixed rate notes and $800 million of term loans subject to various swap agreements. On a pro forma basis, the parameters of the AIR balance sheet include:

  • Leverage to EBITDA ratio of 5.4:1, as of March 31, 2022;

  • Net leverage on gross asset value of 19%;

  • Unencumbered properties with an undepreciated book value of $3.9 billion and a fair value of approximately $8 billion;

  • Approximately $1 billion in available cash;

  • $204 million or 7% of debt subject to floating interest rates or repricing in 2022-24, including $134 million of uncommitted real estate debt maturities;

  • 2022 forecast EBITDA equal to 1.3x the average annual debt service and maturities from 2022 to 2027; and

  • An investment rating of “BBB” from S&P.

About AIR

Apartment Income REIT Corp. (“AIR”) (NYSE: AIRC) is a real estate investment trust focused on owning and managing quality apartment communities located in the largest markets in the United States. AIR is one of the nation’s largest apartment owners and operators, with 76 communities in 11 states and the District of Columbia. Common stock of AIR trades on the New York Stock Exchange under the symbol AIRC and is included in the S&P 400 Index. For more information about AIR, please visit our website at www.aircommunities.com .

Forward-looking statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding projected results and more particularly 2022 earnings forecasts and liquidity and effect measures. AIR lever. We caution investors not to place undue reliance on these forward-looking statements. These forward-looking statements are based on management’s current expectations, estimates and assumptions and are subject to risks and uncertainties, which could cause actual results to differ materially from these forward-looking statements.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the Securities. The Notes have not been and will not be registered under the Securities Exchange Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Matthew O’Grady

Senior Vice President, Capital Markets

[email protected]

(303) 691-4566

Source: Apartment Income REIT Corp.

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