On February 25, 2020, AvalonBay Communities, Inc. (the “Company”)
closed the public offering (the “Offering”) of an aggregate of $700,000,000 principal amount of its 2.30% Medium-Term
Notes due 2030 (the “Notes”).
The Offering was made pursuant to a Pricing Supplement dated
February 10, 2020, a Prospectus Supplement dated February 23, 2018 and a Prospectus dated February 23, 2018 relating to the Company’s
Shelf Registration Statement on Form S-3 (File No. 333-223183). The Terms Agreement, dated February 10, 2020, by and among the
Company and Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC, as representatives of
the agents named therein, is filed as Exhibit 1.1 to this report.
The Notes were issued under an Indenture between the Company
and The Bank of New York Mellon, as trustee (the “Trustee”), dated as of February 23, 2018, a First Supplemental Indenture
between the Company and the Trustee, dated as of March 26, 2018, and a Second Supplemental Indenture between the Company and the
Trustee, dated as of May 29, 2018.
The Notes bear interest from February 25, 2020, with interest
on the Notes payable semi-annually on March 1 and September 1, beginning on September 1, 2020. The Notes will mature on March 1,
2030.
The Company will use the net proceeds, after estimated issuance
costs, of approximately $693,496,000 from the sale of the Notes to redeem the Company’s 3.625% Notes due October 1, 2020
(the “2020 Notes”) in the aggregate principal amount of $400,000,000 and the Company’s 3.950% Notes due January
15, 2021 in the aggregate principal amount of $250,000,000 (the “2021 Notes”), plus in each case accrued interest to
the date of redemption and the related make-whole amount of approximately $8,670,000 in the aggregate. The Company gave notice
of redemption in full of the 2020 Notes and the 2021 Notes to the Trustee on February 10, 2020. To the extent that the proceeds
from the sale of the Notes are not used to redeem the 2020 Notes and the 2021 Notes, the Company will use the proceeds for general
corporate purposes, which may include the acquisition, development and redevelopment of apartment communities and repayment and
refinancing of other indebtedness, which may include indebtedness outstanding under the Company’s $1,750,000,000 unsecured
revolving credit facility. Pending such uses, the Company may invest the net proceeds from the sale of the Notes in short-term
demand deposits, short-term money market funds or investment grade securities or other similar investments.