(Reuters) - Colony American Homes Inc (CAHS.N), a real estate investment trust that buys and rents single-family homes, postponed its initial public offering due to “market conditions,” a market source said.
Colony American had expected its offering of 20 million shares to be priced between $11.50 and $13.00 per share, raising as much as $260 million. At the high end of the range, the company would have been valued at $3.23 billion.
“Rising interest rates and the poor performance of its competitors have made investors wary of stocks which pay high dividends,” said John Fitzgibbon, founder of IPO rating website iposcoop.com.
REITs are required to pay out a majority of its taxable income in the form of dividends.
Colony American is owned by real estate private equity firm Colony Capital through its subsidiary CAH Manager LLC.
The yield on 30-year U.S. Treasuries has risen by about 50 basis points since the beginning of May, with the latest upswing driven by fears that the Federal Reserve could slow its stimulus efforts sooner than anticipated.
Shares of Colony’s competitors, which include Silver Bay Realty Trust Corp SBY.N and American Residential Properties Inc ARPI.N, have fallen below their IPO price.
Silver Bay shares are down about 5 percent since their debut in December, while American Residential shares have fallen about 10 percent since its debut in May.
Credit Suisse, Morgan Stanley and Bofa Merrill Lynch are the lead underwriters on the offering.
Reporting by Avik Das and Tanya Agrawal in Bangalore; Editing by Sriraj Kalluvila