AUSTIN, TX-American Campus Communities Inc. has created anat-the-market equity program, which allows the student housing REITto sell $150 million in common stock from time to time.

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The at-the-market equity program, known as an ATM program, isoffered through BofA Merrill Lynch, J.P. Morgan Securities Inc. andKeyBanc Capital Markets Inc. The ATM program allows ACC to go outand raise smaller chucks of equity whenever it likes the price atwhich its stock is trading, says Daniel Perry, the REIT’s seniorvice president of capital markets.

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“This gives us flexibility to pursue external growth in a mannerthat keeps leverage low and minimizes our cost of capital,” Perrytells GlobeSt. “If we were to do a regular equity offering, wewould have dilution from the money sitting on our balance sheet andthe shares outstanding way before we need the money. With the ATMprogram, we can raise money as we deploy it.”

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ACC intends to use the proceeds from any ATM sales for workingcapital and general corporate purposes including the acquisition ordevelopment of student housing properties and the reduction ofdebt.

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Perry notes that many of ACC’s peer REITs have created ATMprograms. “A lot of large multifamily companies have used an ATMprogram,” he says. “We’ve seen that investors accept it, and we’recomfortable with it. This is a very discreet method of issuingstock.”

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The total equity offerings though the ATM program, along withthe average sell price, will be noted in the company’s Q1.

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