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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): JANUARY 14, 1998
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BAY APARTMENT COMMUNITIES, INC.
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(Exact name of Registrant as specified in charter)
MARYLAND 1-12672 77-0404318
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(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
4340 STEVENS CREEK BOULEVARD, SUITE 275, SAN JOSE, CA 95129
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(Address of principal executive offices) (Zip Code)
(408) 983-1500
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
DEBT OFFERING
On January 20, 1998, Bay Apartment Communities, Inc. (the "Company")
completed an offering of $50,000,000 aggregate principal amount of its 6.250%
Senior Notes due 2003 (the "2003 Notes"), $50,000,000 aggregate principal amount
of its 6.500% Senior Notes due 2005 (the "2005 Notes") and $50,000,000 aggregate
principal amount of its 6.625% Senior Notes due 2008 (the "2008 Notes" and,
together with the 2003 Notes and the 2005 Notes, the "Notes"). The offering of
the Notes was made pursuant to a Prospectus Supplement dated January 14, 1998
relating to the Prospectus dated December 16, 1997, which was originally filed
with the Company's registration statement on Form S-3, as amended (File No.
333-41511).
The 2003 Notes will bear interest at 6.250% per annum and will mature on
January 15, 2003, the 2005 Notes will bear interest at 6.500% per annum and will
mature on January 15, 2005 and the 2008 Notes will bear interest at 6.625% per
annum and will mature on January 15, 2008. The Notes will bear interest from
January 15, 1998 or from the immediately preceding Interest Payment Date (as
defined below) to which interest had been paid, payable semi-annually in arrears
on January 15 and July 15 of each year, commencing July 15, 1998 (each, an
"Interest Payment Date"), to the persons in whose name the applicable Notes are
registered in the security register for each series on the preceding December 31
or June 30 (whether or not a business day), as the case may be. Interest on the
Notes will be computed on the basis of a 360-day year of twelve 30-day months.
The Notes may be redeemed at any time at the option of the Company, in
whole or in part, at a redemption price equal to the sum of (i) the principal
amount of the Notes being redeemed plus accrued interest thereon to the
redemption date, and (ii) the Make-Whole Amount (as defined in the First
Supplemental Indenture referenced below), if any, with respect to such Notes.
The Notes were issued under an Indenture and First Supplemental Indenture,
each between the Company and State Street Bank and Trust Company, as Trustee.
The underwriting discount for the 2003 Notes will be 0.550% and the price to the
public will be 99.969% of the principal amount of the 2003 Notes. The
underwriting discount for the 2005 Notes will be 0.625% and the price to the
public will be 99.749% of the principal amount of the 2005 Notes. The
underwriting discount for the 2008 Notes will be 0.650% and the price to the
public will be 99.710% of the principal amount of the 2008 Notes.
The net proceeds to the Company from the sale of the Notes, after all
anticipated issuance costs, will be approximately $148.7 million. The Company
intends to use the net proceeds to reduce borrowings under its $350 million
unsecured line of credit from Union Bank of Switzerland and other participating
banks (the "Unsecured Credit Facility").
Delivery of the Notes was made on January 20, 1998 through the
facilities of The Depository Trust Company, against payment therefor in
immediately available funds.
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PROPERTY ACQUISITION
Warner Oaks. On January 14, 1998, the Company acquired a 227 apartment
home community located in Woodland Hills, California from De Anza Properties
XII. The purchase price for this community, approximately $20.0 million, was
funded by drawing on the Company's Unsecured Credit Facility. The Unsecured
Credit Facility bears interest at the London Interbank Offered Rate (based on a
maturity selected by the Company) plus 0.90% per annum and matures in May 2000.
Neither the Company, any subsidiary of the Company nor any director or officer
of the Company was affiliated with or had a material relationship with the
seller of this community. This community was previously described in the
Company's Current Report on Form 8-K, dated October 31, 1997, under the section
"Proposed Acquisitions," and the financial statements required under Rule 3-14
of Regulation S-X were filed therewith.
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ITEM 7. FINANCIAL STATEMENTS
EXHIBIT NUMBER EXHIBIT
1.1 Underwriting Agreement, dated January 14, 1998, between
the Company and PaineWebber Incorporated, Morgan Stanley
& Co. Incorporated and UBS Securities LLC.
4.1 Indenture, dated as of January 16, 1998 between the
Company and State Street Bank and Trust Company, as
Trustee.
4.2 First Supplemental Indenture, dated as of January 20,
1998, between the Company and State Street Bank and
Trust Company, as Trustee.
4.3 Bay Apartment Communities, Inc.'s 6.250% Senior Note
due 2003.
4.4 Bay Apartment Communities, Inc.'s 6.500% Senior Note
due 2005.
4.5 Bay Apartment Communities, Inc.'s 6.625% Senior Note
due 2008.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be filed on its behalf by
the undersigned hereunto duly authorized.
BAY APARTMENT COMMUNITIES, INC.
Dated: January 20, 1998 By: /s/ Jeffrey B. Van Horn
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Name: Jeffrey B. Van Horn
Title: Vice President, Chief Financial
Officer, Secretary and Treasurer