American Campus Prices Notes to Boost Liquidity - Analyst Blog

American Campus Communities, Inc. ACC recently priced 10-year senior unsecured notes to boost its liquidity position. In particular, the company's operating arm – American Campus Communities Operating Partnership LP – has issued 4.125% senior notes worth $400 million at 99.861% of par value. The settlement of this offering is expected to complete on Jun 24, 2014, upon fulfillment of customary closing conditions.

The interest on these notes is payable on Jan 1 and Jul 1, on a semiannual basis. The first interest payment will begin on Jan 1, 2015. American Campus projects to reap around $395.3 million from the offering that will be used for paying off the outstanding balance under the revolving credit facility, investing in acquisitions and redevelopments and other corporate needs.

Several renowned financial institutions such as – U.S. Bancorp USB, BofA Merrill Lynch of Bank of America Corporation BAC and J.P. Morgan of JPMorgan Chase & Co. JPM – helped American Campus as Joint Book-Running Managers for this offering.

We believe that American Campus' focus on maintaining a flexible balance sheet with ample liquidity would enable it to operate efficiently and capitalize on potential acquisition and investment opportunities. This, in turn, would help augment its top line. Moreover, paying back of debt would reduce its interest expenses.

Based in Austin, TX, American Campus is a residential real estate investment trust (REIT). The company primarily engages in development, ownership and management of high-quality student housing communities in the U.S.  Currently, the company owns 167 assets comprising about 102,700 beds.  

American Campus currently carries a Zacks Rank #3 (Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
JPMORGAN CHASE JPM: Free Stock Analysis Report
 
US BANCORP USB: Free Stock Analysis Report
 
BANK OF AMER CP BAC: Free Stock Analysis Report
 
AMER CAMPUS CTY ACC: Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research