Preferred Apartment Communities offering up to $500 million of 5.75% $1,000-par redeemable preferreds

By Stephanie N. Rotondo

Seattle, Dec. 2 – Preferred Apartment Communities Inc. is selling up to $500 million of 5.75% $1,000-par series M redeemable preferred stock via a best-efforts offering, the company said in a prospectus filed with the Securities and Exchange Commission on Friday.

The deal can continue until Dec. 2, 2018, with the option to extend it for another year.

Preferred Capital Securities LLC is the dealer manager.

The dividend will increase by 0.25% at the one-year anniversary of issuance and every year thereafter until hitting the 7.5% ceiling.

Dividends will be payable monthly.

In the first year after issuance, the preferreds are putable at par, less a 2% redemption fee. In the second year, the issue is putable at par, less a 1% fee.

In the third year, the issue is putable at par plus accrued dividends.

After the 10-year anniversary, the company can redeem the issue at par plus accrued dividends.

Proceeds will be used in connection with the acquisition of multifamily properties and other real estate-related investments, including grocery-anchored shopping centers, and for general working capital purposes.

Preferred Apartment Communities is an Atlanta-based real estate investment trust.

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