On November 4, 2021,
Mid-America
Apartment Communities, Inc. (the “Company”) and
Mid-America
Apartments, L.P. (the “Operating Partnership”) entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Citigroup Global Markets Inc., Jefferies LLC, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Truist Securities, Inc., and Wells Fargo Securities, LLC (collectively, the “Managers”) and Citibank, N.A., Jefferies LLC, JPMorgan Chase Bank, National Association, KeyBanc Capital Markets Inc., Truist Bank and Wells Fargo Bank, National Association (collectively, the “Forward Purchasers”) in connection with the commencement of a new
equity offering program (the “ATM Program”). Pursuant to the terms and conditions of the Distribution Agreement, the Company may, from time to time, issue and sell through or to the Managers, as sales agents and/or principals or as forward sellers, as agents for the Forward Purchasers, up to 4,000,000 shares of its common stock, par value $0.01 per share (the “Shares”).
The ATM Program replaces the Company’s prior at-the-market program, and along with the previously disclosed 4,000,000 share repurchase program, provides the Company with additional tools to manage its balance sheet and capital structure.
Sales through the Managers as Sales Agents
Sales of the Shares, if any, under the Distribution Agreement through the Managers acting as sales agents, may be made in transactions that are deemed to be
offerings” as defined in Rule 415 under the Securities Act of 1933, as amended, including (1) by means of ordinary brokers’ transactions on the New York Stock Exchange at market prices prevailing at the time of sale, in negotiated transactions or as otherwise agreed by the Company, the applicable Manager and the applicable investor, (2) to or through any market maker or (3) on or through any other national securities exchange or facility thereof, trading facility of a securities association or national securities exchange, alternative trading system, electronic communication network or other similar market venue. The Company has no obligation to sell any of the Shares and may at any time suspend offers under the Distribution Agreement. The actual sale of Shares under the ATM Program will depend on a variety of factors to be determined by the Company from time to time, including, among other things, market conditions, the trading price of the Company’s common stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company.
The Company will pay the Managers an aggregate fee that will not exceed, but may be lower than, 2% of the gross sales price of the Shares sold through them acting as sales agents. Under the terms of the Distribution Agreement, the Company also may sell Shares (i) to each of the Managers, as principal, pursuant to a separate terms agreement, or (ii) in connection with one or more Confirmations (as defined below).
Under the Distribution Agreement, in addition to the issuance and sale of Shares by the Company through the Managers acting as sales agents, the Company also may enter into separate forward sale agreements (each, a “Confirmation” and, collectively, the “Confirmations”) with the Forward Purchasers, the form of which is filed as Exhibit 99.1 hereto. In connection with any particular Confirmation, the relevant Forward Purchasers will, at the Company’s request, borrow from third parties and, through the relevant Manager, acting in its role as forward seller, sell a number of shares of the Company’s common stock equal to the number of shares underlying the particular Confirmation.
The Company will not receive any proceeds from any sale of borrowed Shares by a forward seller. The Company currently expects to fully physically settle each Confirmation with the relevant Forward Purchaser on one or more dates specified by the Company on or prior to the maturity date of that particular Confirmation, in which case the Company will expect to receive aggregate net cash proceeds at settlement equal to the number of Shares underlying the particular Confirmation multiplied by the relevant forward sale price. However, subject to certain exceptions, the Company may also elect, in its discretion, to cash settle or net share settle a particular Confirmation, in which case the Company may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and the Company may owe cash (in the case of cash settlement) or Shares (in the case of net share settlement) to the relevant Forward Purchaser.
The Shares will be offered pursuant to the Company’s and the Operating Partnership’s shelf registration statement on Form
S-3
(File
No. 333-258271
and Registration
respectively), which became effective upon filing with the Securities and Exchange Commission (the “SEC”) on July 29, 2021 (the “Shelf
