Preferred Apartment Communities to sell up to $150 million preferreds

By Stephanie N. Rotondo

Portland, Ore., Sept. 1 - Preferred Apartment Communities, Inc. is planning to issue up to $150 million of preferred stock units containing one 6% series A redeemable preferred share and one warrant, according to a registration statement filed with the Securities and Exchange Commission Thursday.

The company will sell a minimum of 2,000 units to a maximum of 150,000 units. Each unit will be sold at $1,000, bringing in proceeds of $2 million to $150 million.

Each four-year warrant is exercisable for 20 shares of common stock at 120% of the current market price upon exercise.

Dividends on the series A preferreds will be payable on the 20th of each month.

Two years after issuance, the preferreds can be put back at 90% of par value plus accrued dividends. The redemption price goes up to 95% of par after three years, to 97% of par after four years and to par after five years.

The company also has the right to redeem the preferreds at par plus accrued dividends after 10 years.

The company can choose to pay any redemption in common stock.

The preferreds will not be listed on any exchange.

International Assets Advisory LLC is the dealer manager.

Proceeds from the offering will be used to acquire multifamily properties.

Atlanta-based Preferred Apartment Communities acquires and operates multifamily properties.

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