Apartment Investment and Management Co., an apartment REIT, has completed a complicated stock conversion.

In the deal, AIMCO has converted $97.6 million, or 1.95 million shares of trust convertible preferred securities into 1.967 million shares of AIMCO's Class A common stock. A total of $149.5 million in convertible preferred securities were assumed by AIMCO in October 1998, when it merged with Insignia Financial Group Inc. The preferred securities carry a conversion price of $49.61 per share, based on a liquidation amount of $50 per share that equates to 1.0079 shares of Class A common stock for each preferred share. The shares previously have been included in AIMCO's count of fully diluted shares outstanding for purposes of calculating Adjusted Funds From Operations per share and FFO per share. Therefore, the action does not increase AIMCO's fully diluted share count. AFF0 and FFO are important measures of a REIT's financial health.

“The conversion of these preferred securities allows Aimco to increase its financial flexibility by expanding the common equity base as well as improving fixed charge-coverage ratios,” says Peter Kompaniez, AIMCO president and vice chairman.