| Item 1.01. | Entry Into a Material Definitive Agreement. |
On January 30, 2024, American Homes 4 Rent, L.P. (the “Operating Partnership”) completed the previously announced offering of $600,000,000 aggregate principal amount of 5.500% Senior Notes due 2034 (the “Notes”).
The Operating Partnership previously entered into an Indenture, dated as of February 7, 2018 (the “Base Indenture”), between the Operating Partnership, as issuer, and U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as trustee (the “Trustee”). In connection with the issuance of the Notes, the Operating Partnership entered into the Seventh Supplemental Indenture dated as of January 30, 2024 (the “Seventh Supplemental Indenture”) relating to the Notes (the Seventh Supplemental Indenture, together with the Base Indenture, the “Indenture”), between the Operating Partnership and the Trustee.
The Notes were issued at 99.893% of par value with a coupon of 5.500% per annum. Interest on the Notes is payable semi-annually in arrears on February 1 and August 1 of each year, commencing August 1, 2024. The Notes will mature on February 1, 2034. The Notes are the Operating Partnership’s unsecured and unsubordinated obligations and rank equally in right of payment with all of the Operating Partnership’s existing and future unsecured and unsubordinated indebtedness.
Under limited circumstances, the Indenture will require certain of the Operating Partnership’s subsidiaries and American Homes 4 Rent (the “Company”) to guarantee the Notes in the future if, and for so long as, such subsidiary or the Company, as the case may be, guarantees the Operating Partnership’s obligations under its revolving credit facility.
The Operating Partnership may redeem the Notes in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) a “make-whole” amount and (ii) 100% of the principal amount of the notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to, but not including, the date of redemption. If the Notes are redeemed on or after November 1, 2033 (three months prior to the maturity date), the redemption price will be equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.
The Indenture contains certain covenants that, among other things, limit the ability of the Operating Partnership, subject to exceptions, to incur secured and unsecured indebtedness and to consummate a merger, consolidation or sale of all or substantially all of its assets. In addition, the Indenture requires the Operating Partnership to maintain total unencumbered assets of at least 150% of total unsecured indebtedness. These covenants are subject to a number of important exceptions and qualifications. The Indenture also provides for customary events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the Notes to become due and payable.
The foregoing description is a summary of the terms of the Indenture and the Notes and does not purport to be a complete statement of the parties’ rights and obligations thereunder. The foregoing description is qualified in its entirety by reference to the full text of the Base Indenture and the Seventh Supplemental Indenture (including the form of Notes), copies which are respectively attached as Exhibit 4.1 and Exhibit 4.2 to this Current Report on Form
8-K
and incorporated by reference herein.
The offering was made pursuant to an automatic shelf registration statement filed with the Securities and Exchange Commission on June 9, 2023 (File Nos.
333-272547
and
a base prospectus, dated June 9, 2023, and prospectus supplement, dated January 23, 2024, filed by the Operating Partnership with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of the Registrant. |
The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.
