| Item 1.01. | Entry into a Material Definitive Agreement. |
On September 12, 2018, American Homes 4 Rent (the “Company”) and American Homes 4 Rent, L.P., the Company’s operating partnership (the “Operating Partnership”), entered into an Underwriting Agreement (the “Underwriting Agreement”) with Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC, as representatives (the “Representatives”) of the several underwriters named therein (the “Underwriters”), for the sale of 4,000,000 of its 6.25% Series H cumulative redeemable perpetual preferred shares of beneficial interest, par value $0.01 per share (the “Series H Preferred Shares”). Pursuant to the terms of the Underwriting Agreement, the Company granted the Underwritersa 30-day option to purchase up to an additional 600,000 Series H Preferred Shares at the public offering price per share, less the underwriting discount. The Company estimates that the net proceeds from the offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, will be approximately $96.5 million. The offering is expected to close on September 19, 2018, subject to customary closing conditions.
The offering was made pursuant to an automatic shelf registration statement filed with the Securities and Exchange Commission on August 4, 2017 (FileNo. 333-219720), a base prospectus, dated August 4, 2017, included as part of the registration statement, and a prospectus supplement, dated September 12, 2018, to be filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”).
The Company expects to contribute the net proceeds from the offering to the Operating Partnership in exchange for 6.25% Series H cumulative redeemable perpetual preferred operating partnership units. The Operating Partnership intends to use the net proceeds from the contribution along with available cash to fund the exchange for cash of the $115.0 million face value of outstanding 3.25% exchangeable senior notes due November 15, 2018. A copy of the amendment to the Partnership Agreement relating to the 6.25% Series H cumulative redeemable perpetual preferred operating partnership units is filed as Exhibit 10.1.
The Company and the Operating Partnership made certain customary representations, warranties and covenants concerning the Company, the Operating Partnership and the registration statement in the Underwriting Agreement and also agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the Underwriters may be required to make in respect of those liabilities.
The Underwriters have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Company or its affiliates. The Underwriters have received, and may in the future receive, customary fees and commissions for these transactions.
A copy of the Underwriting Agreement is attached to this report as Exhibit 1.1 and incorporated herein by reference. The summary set forth above is qualified in its entirety by reference to Exhibits 1.1 and 10.1.
| Item 3.03. | Material Modification to Rights of Security Holders. |
Upon issuance of the Series H Preferred Shares referenced in Item 5.03 below, the ability of the Company to make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment on, any other shares of beneficial interest of the Company ranking junior to or on a parity with the Series H Preferred Shares, will be subject to certain restrictions in the event that the Company does not declare distributions on the Series H Preferred Shares during any distribution period. The terms of the Series H Preferred Shares are set forth in the Articles Supplementary to the Company’s Declaration of Trust, as amended, that are filed as Exhibit 3.1 hereto and incorporated herein by reference.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
| | (a) | Under the Company’s Declaration of Trust, as amended, the Board of Trustees is authorized without further shareholder action to provide for the issuance of up to 100,000,000 preferred shares of beneficial interest. On September 13, 2018, the Company filed with the Maryland State Department of Assessments and Taxation, Articles Supplementary designating 4,600,000 of the Company’s preferred shares of beneficial interest as “6.25% Series H Preferred Shares.” |
