AvalonBay Communities, Inc. (AVB), a leading real estate investment trust (REIT), has recently offered $500 million of medium-term unsecured notes to reduce its debt.

The company has decided to offer the notes in two separate tranches of $250 million each, the first maturing in 2017 and the second in 2020. The coupon rate on the former is 5.7% while that of the latter is 6.1%.

AvalonBay intends to raise net proceeds of approximately $495 million from the transactions. The proceeds would be utilized to reduce the debt under its revolving credit facility and refinance some of its outstanding long-term debt securities. AvalonBay also intends to use a part of the proceeds for general corporate purposes.

AvalonBay primarily focuses on developing high-quality, multi-family apartment communities for higher-income clients in high barrier-to-entry regions of the U.S. As of June 30, 2009, the company owned or held ownership interests in 174 apartment communities, with 50,511 apartment homes in 10 states in the U.S. and the District of Columbia Incorporatedluding 12 communities under construction and 7 under redevelopment.

Zacks Investment Research
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