On May 22, 2020, AvalonBay Communities, Inc. (the
“Company”) closed the public offering (the “Offering”) of an aggregate of $600,000,000 principal
amount of its 2.450% Medium-Term Notes due 2031 (the “Notes”).
The Offering was made pursuant to a Pricing Supplement
dated May 8, 2020, a Prospectus Supplement dated February 23, 2018 and a Prospectus dated February 23, 2018 relating to the
Company’s Shelf Registration Statement on Form S-3 (File No. 333-223183). The Terms Agreement, dated May 8, 2020,
by and among the Company and Citigroup Global Markets Inc., BofA Securities, Inc., SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC, as
representatives of the agents named therein, is filed as Exhibit 1.1 to this report.
The Notes were issued under an Indenture between the Company
and The Bank of New York Mellon, as trustee (the “Trustee”), dated as of February 23, 2018, a First Supplemental Indenture
between the Company and the Trustee, dated as of March 26, 2018, and a Second Supplemental Indenture between the Company and the
Trustee, dated as of May 29, 2018.
The Notes bear interest from May 22, 2020, with interest
on the Notes payable semi-annually on January 15 and July 15, beginning on July 15, 2020. The Notes will mature on January 15, 2031.
The Company will use a portion of the net proceeds, after
estimated issuance costs, of approximately $592,400,000 from the sale of the Notes to redeem its Floating Rate Notes due 2021
(the "2021 Notes") in the aggregate principal amount of $300,000,000, plus accrued interest to the date of redemption. The
Company gave notice of redemption in full of the 2021 Notes to the Trustee on May 8, 2020. The Company will use the
proceeds from the sale of the Notes that are not used to redeem the 2021 Notes for general corporate purposes, which may
include the acquisition, development and redevelopment of apartment communities and repayment and refinancing of other
indebtedness, which may include indebtedness outstanding under its $1,750,000,000 unsecured revolving credit facility.
Borrowings under the Company's unsecured revolving credit facility were used to fund the acquisition, development and
redevelopment of apartment communities, to repay outstanding indebtedness and for general working capital purposes. Pending
such uses, the Company may invest the net proceeds from the sale of the Notes in short-term demand deposits, short-term money
market funds or investment grade securities or other similar investments.