Item 1.01. Entry Into a Material Definitive Agreement.
On January 23, 2019, American Homes 4 Rent, L.P. (the “Operating Partnership”) completed the previously announced offering of $400,000,000 aggregate principal amount of 4.900% Senior Notes due 2029 (the “Notes”).
In connection with the issuance of the Notes, the Operating Partnership entered into a Second Supplemental Indenture, dated as of January 23, 2019 (the “Supplemental Indenture”), between the Operating Partnership, as issuer, and U.S. Bank National Association, as trustee (the “Trustee”), which supplemented the Indenture, dated as of February 7, 2018 (the “Base Indenture” and, together with the Supplemental Indenture, the “Indenture”), between the Operating Partnership and the Trustee.
The Notes bear interest at a rate of 4.900% per annum accruing from January 23, 2019. Interest on the Notes is payable semi-annually on February 15 and August 15 of each year, commencing August 15, 2019. The Notes will mature on February 15, 2029. The Notes are the Operating Partnership’s unsecured and unsubordinated obligations and will 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 the applicable make-whole redemption price specified in the Indenture. If the Notes are redeemed on or after November 15, 2028 (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 Supplemental Indenture (including the form of Notes), copies of which are attached as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form8-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 December 1, 2017 (FileNo. 333-221878), as post-effectively amended on January 15, 2019, and a base prospectus and prospectus supplement, each dated January 15, 2019, filed by the Operating Partnership with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended.
