(By Balaseshan) UDR Inc. (NYSE:UDR), a multi-family real estate investment trust (REIT), said it priced an underwritten public offering of 19 million shares of its common stock at $25.70 per share, a 3.4% discount to Tuesday's close.
The company expects net proceeds of about $468.5 million after underwriting discounts and commissions and estimated offering expenses (or about $538.8 million if the underwriters' option to purchase additional shares is exercised in full).
UDR has granted the underwriters a 30-day option to purchase up to an additional 2.85 million shares of common stock. The offering is expected to close on June 4, 2012, subject to customary closing conditions.
All of the shares of common stock were offered by the company and will be issued under a currently effective shelf registration statement filed with the Securities and Exchange Commission.
The Company expects to use the net proceeds from the offering to repay approximately $364 million of its 3.3% secured debt due 2012 - 2014, and to redeem all of its outstanding 6.75% Series G Preferred Stock for a total cash cost of $81.6 million plus accrued and unpaid dividends up to the redemption date,
The company also anticipates to use the net proceeds to repay a portion of the indebtedness currently outstanding under its unsecured credit facility and the balance for working capital and general corporate purposes.
BofA Merrill Lynch, J.P. Morgan, Citigroup, Credit Suisse and Morgan Stanley served as joint book-running managers for the offering.
UDR owns, operates, acquires, renovates, develops, redevelops, and manages multifamily apartment communities located throughout the United States, whose asset is its ownership interest in the United Dominion Realty, L.P.
UDR is trading down 3.61% at $25.65 on Wednesday. The stock has been trading between $20.04 and $27.26 for the past 52 weeks.