American Campus Prices Notes to Boost Liquidity - Analyst Blog


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American Campus Communities, Inc. ( ACC ) recently priced 10-year senior unsecured notes to boost its liquidity position. In particular, the company's operating arm - American Campus Communities Operating Partnership LP - has issued 4.125% senior notes worth $400 million at 99.861% of par value. The settlement of this offering is expected to complete on Jun 24, 2014, upon fulfillment of customary closing conditions.

The interest on these notes is payable on Jan 1 and Jul 1, on a semiannual basis. The first interest payment will begin on Jan 1, 2015. American Campus projects to reap around $395.3 million from the offering that will be used for paying off the outstanding balance under the revolving credit facility, investing in acquisitions and redevelopments and other corporate needs.

Several renowned financial institutions such as - U.S. Bancorp ( USB ), BofA Merrill Lynch of Bank of America Corporation ( BAC ) and J.P. Morgan of JPMorgan Chase & Co. ( JPM ) - helped American Campus as Joint Book-Running Managers for this offering.

We believe that American Campus' focus on maintaining a flexible balance sheet with ample liquidity would enable it to operate efficiently and capitalize on potential acquisition and investment opportunities. This, in turn, would help augment its top line. Moreover, paying back of debt would reduce its interest expenses.

Based in Austin, TX, American Campus is a residential real estate investment trust (REIT). The company primarily engages in development, ownership and management of high-quality student housing communities in the U.S.  Currently, the company owns 167 assets comprising about 102,700 beds.  

American Campus currently carries a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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