American Homes 4 Rent Prices New Preferred

AMH has priced their new issue of perpetual preferred stock with a coupon of 6.25%.

The issue will have expected ratings of Ba1 from Moodys and BB from S&P–junk rated.

They will sell 4 million shares with another 600,000 shares for overallotments.

The proceeds will be used to pay off a short term senior note due 11/15/2018.

The pricing term sheet can be found here.

If one can buy it cheap (like 24.60-24.80) there may be a chance of a very modest flip–for 30-50 cents.  Beyond a potential modest flip we have no interest in the issue.

NO OTC Grey Market ticker has been posted as of now (4:45 pm central), but we would expect one tomorrow with trading starting Thursday afternoon or Friday.  The issue will have a ticker of AMH-H when it hits the NYSE.

6 thoughts on “American Homes 4 Rent Prices New Preferred”

  1. I own shares of American Homes 4 Rent preferred AMHpE, 6.35%. The preferred has sold as high at $26.79. Raymond James rates AMH as a “strong buy 1”, with medium risk.

    1. Hi Larry–yes the preferreds have always traded really strong–and the perceived risk is low–in spite of just marginal income.

      1. I honestly do not get the attraction. In addition to Raymond James, tipranks on etrade has 5 other analysts saying buy on the common stock with an average 15% upside. With these kind of earnings, I do not get it. Schwab which I find to be very cautious says hold. Moodys rating BA1 is just one notch below investment grade. It certainly appears to be well respected by investment community. I do not want this long term. My short term strategy is normally to buy at a discount, hold for a year, and try to flip at par. Generally, I don’t look to flip on price. With this one, if we can get to the range Tim is suggesting, I would flip on price. Tim, the 6.35% series is trading at $25.59. Are you thinking a target about $25.30?

        1. Never mind Tim, you answered that. A modest flip at 0.30 – 0.50, so the target you seem to have in mind is about 25.10

    1. Hi Eugene–just working on it. It doesn’t show up with the SEC because they file a 6F instead of a 424B form–but like you I noticed it on the daily list.

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