Colony Starwood Homes Upsizes Offering, Prices $300 Million of Convertible Senior Notes
January 04 2017 - 6:29PM
Business Wire
Colony Starwood Homes (NYSE:SFR) (“the Company”), a leading
single-family rental real estate investment trust (“REIT”),
announced today the pricing of $300 million aggregate principal
amount of 3.50% convertible senior notes due 2022 (the “Convertible
Senior Notes”), which was upsized from the previously announced
$250 million aggregate principal amount. The Company has granted
the initial purchasers a 30-day option to purchase up to an
additional $45.0 million aggregate principal amount of the
Convertible Senior Notes.
The Company intends to use the net proceeds from this offering
to repurchase, in privately negotiated transactions, certain of its
4.50% convertible senior notes due 2017, to repay a portion of the
borrowings outstanding under its credit facilities, to fund
potential future acquisitions and for general corporate
purposes.
The Convertible Senior Notes will be unsecured and pay interest
at a rate of 3.50% per year, semiannually. In certain
circumstances, the Convertible Senior Notes will be convertible
into cash, common shares of the Company or a combination of cash
and common shares of the Company, at the Company’s election, based
on an initial conversion rate of 27.1186 common shares per $1,000
principal amount of Convertible Senior Notes, which is equivalent
to an initial conversion price of approximately $36.88 per common
share of the Company, subject to customary anti-dilution
adjustments. The conversion price is approximately 25.0% above the
$29.50 per share closing price per common share of the Company on
January 4, 2017. The Convertible Senior Notes will mature on
January 15, 2022, unless repurchased, redeemed or converted in
accordance with their terms prior to such date. Other than to the
extent necessary to preserve its status as a REIT, the Company will
not have the right to redeem the Convertible Senior Notes prior to
maturity.
The sale of the Convertible Senior Notes is expected to close on
or about January 10, 2017, subject to satisfaction of customary
market and other closing conditions.
The offer and sale of the Convertible Senior Notes and the
common shares that may be issued upon conversion thereof have not
been and will not be registered under the Securities Act of 1933,
as amended (the “Securities Act”). Neither the Convertible Senior
Notes nor the common shares that may be issued upon conversion
thereof may be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act.
The Convertible Senior Notes will be offered only to qualified
institutional buyers (as defined under the Securities Act) pursuant
to Rule 144A under the Securities Act.
This press release is neither an offer to sell nor a
solicitation of an offer to buy the Convertible Senior Notes or the
common shares issuable upon conversion of the Convertible Senior
Notes, if any, nor shall there be any sale of these securities in
any state or jurisdiction in which such an offer, solicitation or
sale would be unlawful prior to the registration or qualification
under the securities laws of such state or jurisdiction.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, that involve significant risks and uncertainties,
which are difficult to predict, and are not guarantees of future
performance. Such statements can generally be identified by words
such as “anticipates,” “expects,” “intends,” “will,” “could,”
“believes,” “estimates,” “continue,” and similar expressions.
Forward-looking statements are based on certain assumptions,
discuss future expectations, describe future plans and strategies,
contain financial and operating projections or state other
forward-looking information. The Company’s ability to predict
results or the actual effect of future events, actions, plans or
strategies is inherently uncertain. Although the Company believes
that the expectations reflected in such forward-looking statements
are based on reasonable assumptions, the Company’s actual results
and performance could differ materially from those set forth in, or
implied by, the forward-looking statements. Factors that could
materially and adversely affect the Company’s business, financial
condition, liquidity, results of operations and prospects, as well
as the Company’s ability to make distributions to its shareholders,
include, but are not limited to: failure to plan and manage the
merger (the “Merger”) with Colony American Homes (“CAH”) and
associated transitions effectively and efficiently; the possibility
that the anticipated benefits from the Merger may not be realized
or may take longer to realize than expected; unexpected costs or
unexpected liabilities that may arise from the Merger; the outcome
of any legal proceedings that have been or may be instituted
against the Company, CAH or others following the announcement or
the completion of the Merger and associated transitions; changes in
the Company’s business and growth strategies; volatility in the
real estate industry, interest rates and spreads, the debt or
equity markets, the economy generally or the rental home market
specifically; declines in the value of homes, and macroeconomic
shifts in demand for, and competition in the supply of, rental
homes; the availability of attractive investment opportunities in
homes that satisfy the Company’s investment objectives and business
and growth strategies; the Company’s ability to exit its
non-performing loans business in the anticipated time period on
acceptable terms and to re-deploy net cash proceeds therefrom; the
Company’s ability to lease or re-lease its rental homes to
qualified residents on attractive terms or at all; the
availability, terms and deployment of short-term and long-term
capital; the adequacy of the Company’s cash reserves and working
capital; potential conflicts of interest with Starwood Capital
Group Global, L.P., Colony Capital, Inc. and their affiliates;
effects of derivative and hedging transactions; the Company’s
ability to maintain effective internal controls as required by the
Sarbanes-Oxley Act of 2002 and to comply with other public
company regulatory requirements; the Company’s ability to maintain
its exemption from registration as an investment company under the
Investment Company Act of 1940, as amended; changes in governmental
regulations, tax laws and rates, and similar matters; limitations
imposed on the Company’s business and its ability to satisfy
complex rules in order for the Company and, if applicable, certain
of the Company’s subsidiaries to qualify as a REIT for U.S. federal
income tax purposes, and the Company’s ability and the ability of
its subsidiaries to operate effectively within the limitations
imposed by these rules; and whether this offering will be completed
and the uses of proceeds from this offering. You should not place
undue reliance on any forward-looking statement and should consider
all of the uncertainties and risks described above, as well as
those more fully discussed in reports and other documents filed by
the Company with the Securities and Exchange Commission from time
to time. Furthermore, except as required by law, the Company is
under no duty to, and the Company does not intend to, update any of
its forward-looking statements after the date of this press
release, whether as a result of new information, future events or
otherwise, except as may be required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20170104006539/en/
for Colony Starwood HomesInvestor RelationsPhone:
480-800-3363Email: IR@colonystarwood.comorMedia
RelationsJason ChudobaPhone:
646-277-1249Jason.chudoba@icrinc.com
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