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Preferred Apartment Communities Preps $1.5 Billion Offering, Taps Investacorp to Sell Shares

Preferred Capital Securities LLC, the dealer manager for Preferred Apartment Communities (NYSE: APTS) – a publicly traded real estate investment trust, entered into a soliciting dealer agreement with Investacorp to sell shares of the company’s Series A redeemable preferred stock and warrants.

The Series A redeemable preferred stock and the warrants will be sold in units, with each unit consisting of one share of Series A redeemable preferred stock for $1,000 per share, and one warrant to purchase 20 shares of APTS common stock, exercisable by the holder at a price that is set at a 20 percent premium to the current price per share of the company’s common stock.

The warrant price will be determined using the closing price of the common stock immediately preceding the issuance of the warrant, at a minimum exercise price of $19.50 per share.

Investacorp has agreed to sell the units for a 5 percent commission.

Last month, PAC filed a prospectus for 1.5 million shares of the Series A redeemable stock and warrants to purchase 30 million shares of common stock.

The $1000 per unit public offering price includes a 7 percent selling commission and a 3 percent dealer manager fee. The company noted in the prospectus that if a participating broker-dealer reduces its selling commissions below 7 percent, the public offering price per unit will be decreased by an amount equal to the reduction.

If all units are sold, the company would receive approximately $1.3 billion, after deducting $172.5 million for selling commissions and dealer manager fees.

The company intend to use the net proceeds of the offering to purchase multifamily properties and other real estate-related investments and for general working capital purposes.

The offering is scheduled to terminate by February 14, 2019. Shares of APTS stock closed at $13.82 on Wednesday.

For more Preferred Capital news, visit their directory page here.