Americold Realty Trust (NYSE:COLD), a real estate investment trust, has entered into a material definitive agreement resulting in the creation of a direct financial obligation, according to a recent SEC filing. The company, specializing in temperature-controlled warehouses, completed a public offering of $500 million in aggregate principal amount of 5.4% senior unsecured notes due 2034.
The offering was made under an effective shelf registration statement filed with the Securities and Exchange Commission on March 17, 2023, and was supplemented by a prospectus supplement filed on September 9, 2024. The notes were priced at 99.3% of the principal amount and will pay interest semi-annually starting March 12, 2025.
Americold Realty Trust and various subsidiaries, including Americold Realty Operating Partnership, L.P., have guaranteed the notes, which rank equally with the company's existing and future unsecured senior indebtedness. The notes are, however, subordinated to secured indebtedness to the extent of the assets securing such indebtedness.
The company may redeem the notes at any time before June 12, 2034, at a price equal to the greater of 100% of the principal amount or a make-whole premium. After this date, the notes can be redeemed at 100% of the principal amount plus accrued interest.
In other recent news, Americold Realty Trust has marked significant financial strides, including a 36% increase in Adjusted Funds From Operations (AFFO) to approximately $109 million, or $0.38 per share. This growth was primarily driven by strong same-store warehouse services and effective pricing strategies.
Consequently, Americold has raised its full-year 2024 AFFO guidance to a range of $1.44 to $1.50 per share. In other developments, the company has sealed a $500 million notes deal, led by a group of underwriters including BofA Securities, Citigroup Global Markets, and J.P. Morgan Securities.
InvestingPro Insights
In light of Americold Realty Trust's recent financial maneuvering, insights from InvestingPro provide a real-time snapshot of the company's financial health and market performance. As of the last twelve months as of Q2 2024, Americold has a market capitalization of approximately $8.23 billion. Despite a slight revenue decline of 4.72%, the company has maintained a gross profit margin of 30.86%. According to InvestingPro Tips, Americold is anticipated to become profitable within the year, a notable turnaround considering it has not been profitable over the past twelve months.
InvestingPro also highlights Americold as a prominent player in the Industrial REITs industry, a factor that could influence investor confidence in the context of the company's recent $500 million senior notes offering. However, investors should be aware that the company's short-term obligations currently exceed its liquid assets, which may present a liquidity risk. Additionally, Americold is trading at a high EBIT valuation multiple, suggesting the market has high expectations for future earnings growth. For those interested in a deeper analysis, InvestingPro offers additional tips on Americold Realty Trust (https://www.investing.com/pro/COLD).
With a dividend yield of 3.03% as of the latest data, Americold presents a potential income stream for investors. The company's next earnings date is set for October 31, 2024, which will be a crucial time for investors to assess the company's progress toward profitability and the effectiveness of its financial strategies.
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