American Finance Trust Cuts Distributions, Amends Share Repurchase Program
American Finance Trust, a publicly registered non-traded REIT sponsored by AR Global, amended its existing share repurchase program and the company’s distribution rate, according to a filing with the Securities and Exchange Commission.
The board approved the amendments after considering the company’s long-term business strategy and desire to preserve capital that could be used to acquire additional assets and increase its distribution coverage.
According to Summit Investment Research, American Finance Trust has a 72 percent distribution coverage ratio, and had a $0.76 per share total overdistribution, as of the first quarter of 2017.
The board unanimously authorized a decrease from $1.65 to $1.30 per share paid to stockholders on an annualized basis.
This represents a change in the annualized distribution yield, based on the original purchase price of $25.00 per share, from 6.6 percent to 5.2 percent, or a change from 7.1 percent to 5.6 percent based on the most recent estimated net asset value of December 31, 2016 of $23.37 per share. The new rate will be reflected in the August 5th distribution payment.
The board also amended the share repurchase program which will become effective on July 14, 2017. Under the new plan, subject to certain conditions, only repurchase requests made following the death or qualifying disability of stockholders will be considered for repurchase by the company.
American Finance Trust commenced its initial public offering in April 2013, which closed six months later after raising $1.6 billion in investor equity. In February 2017, the company completed its merger with affiliated non-traded REIT, American Realty Capital – Retail Centers of America, and now owns a portfolio of 491 properties with a total purchase price of $3.5 billion.
