AvalonBay accepts tenders for $300 million of four series of notes

By Angela McDaniels

Tacoma, Wash., Oct. 7 - AvalonBay Communities, Inc. said it accepted tenders for $300 million principal amount of notes in an oversubscribed tender offer that expired at midnight ET on Oct. 5.

The company offered to purchase up to $300 million principal amount of its outstanding 7.5% medium-term notes due Dec. 15, 2010, 6.625% MTNs due Sept. 15, 2011, 5.5% MTNs due Jan. 15, 2012 and 6.125% MTNs due Nov. 1, 2012. There was a sublimit of $150 million for the 6.625% notes.

The acceptance priority level was one for the 7.5% notes, two for the 6.625% notes and three for the 5.5% notes and 6.125% notes.

AvalonBay accepted for purchase $46,001,000 of its $135,577,000 of 7.5% notes, $150 million of its $350 million of 6.625% notes, $55.6 million of its $235 million of 5.5% notes and $48,399,000 of its $250 million of 6.125% notes.

All of the 7.5% notes tendered were accepted. For the remaining notes, the cap was not enough to purchase all notes tendered. The proration factor was 56% for the second-priority notes and 47% for the third-priority notes.

For each $1,000 principal amount, the purchase price is $1,075.00 for the 7.5% notes, $1,090.00 for the 6.625% notes, $1,062.50 for the 5.5% notes and $1,087.50 for the 6.125% notes.

Each price includes a $30.00 premium for notes tendered by 5 p.m. ET on Sept. 21, the early tender date.

AvalonBay also paid accrued interest to the payment date, which was Oct. 6.

The tender offer began Sept. 8.

Morgan Stanley & Co. Inc. (800 624-1808 or collect 212 761-5384) and J.P. Morgan Securities Inc. (866 834-4666 or collect 212 834-4802) were the lead dealer managers. Bank of America Merrill Lynch and Wells Fargo Securities, LLC were the co-dealer managers. Global Bondholder Services Corp. (866 470-4200 or banks and brokers 212 430-3774) was the information agent and depositary.

The issuer is a real estate investment trust based in Alexandria, Va. It develops, redevelops, acquires and manages apartment communities in high barrier-to-entry markets of the United States.

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