America First Multifamily Investors, L.P. Converts Two Variable Rate TEBS to Fixed Rate and Extends Maturities
July 22 2019 - 4:05PM
On July 16, 2019, America First Multifamily Investors, L.P. (the
“Partnership”) entered into amendments to its Series M-024 and
M-033 Tax-Exempt Bond Securitization (“TEBS”) programs (“TEBS
Financing(s)”) with the Federal Home Loan Mortgage Corporation
(“Freddie Mac”). The amendments resulted in a conversion from
variable interest rates to fixed interest rates for its M-024 and
M-033 TEBS Financings. In addition, the Partnership extended
the term of its M-024 and M-033 TEBS Financings to May 15, 2027 and
September 15, 2030, respectively.
The M-024 and M-033 TEBS Financings each
represent the securitization of seven of the Partnership’s mortgage
revenue bonds (the “Bonds”). Under the terms of the M-024 and M-033
TEBS Financings, the Partnership transferred the Bonds to ATAX TEBS
I, LLC, and ATAX TEBS III, LLC, special purpose entities controlled
by the Partnership (the “Sponsor(s)”). The Sponsors then
securitized the assets by transferring the Bonds to Freddie Mac in
exchange for tax-exempt Class A and Class B Freddie Mac Multifamily
Certificates for each respective series (collectively the “TEBS
Certificates”) issued by Freddie Mac. The TEBS Certificates
represent beneficial interests in the securitized assets held by
Freddie Mac.
The Class A TEBS Certificates have been
credit-enhanced by Freddie Mac and have been remarketed through a
placement agent to unaffiliated investors. The fixed rate of
interest to be paid on the M-024 Class A Certificates is equal to
2.30% per annum plus certain credit enhancement and servicing fees
(“the Facility Fees”). As of closing, the total Facility Fees
were approximately 0.75% per annum, resulting in a total stated
interest rate of the M-024 TEBS Financing of approximately 3.05%
per annum. The fixed rate of interest to be paid on the M-033
Class A Certificates is equal to 2.65% per annum plus certain
Facility Fees. As of closing, the total Facility Fees were
approximately 0.59% per annum, resulting in a total stated interest
rate of the M-033 TEBS Financing of approximately 3.24% per
annum.
The holders of the M-024 and M-033 Class A TEBS
Certificates are entitled to receive regular payments of interest
from Freddie Mac at a fixed rate, which will be made prior to any
payments of interest on the Class B TEBS Certificates held by the
Sponsor. As the holder of the Class B TEBS Certificates, the
Sponsors are not entitled to receive interest payments on the Class
B TEBS Certificates at any particular rate, but will be entitled to
all payments of principal and interest on the assets held by
Freddie Mac after payment of principal and interest due on the
Class A M-024 and M-033 TEBS Certificates and payment of the
Facility Fees and expenses associated with the respective TEBS
Financings.
The amount of the remarketed M-024 Class A TEBS
Certificates is approximately $41.1 million and the M-024 Class B
TEBS Certificates, with a total value of approximately $20.3
million, were retained by the Sponsor. The amount of the
remarketed M-033 Class A TEBS Certificates is approximately $31.6
million and the M-033 Class B TEBS Certificates, with a total value
of approximately $21.1 million, were retained by the
Sponsor.
To accomplish the extensions of maturities and
conversions to fixed interest rates, Freddie Mac and the
Partnership amended the Series Certificate Agreements which created
the TEBS Financings. The amendments were mostly
technical, relating to the conversion to fixed interest rates, the
elimination of remarketing the Class A Certificates and Freddie
Mac’s obligation to purchase the Class A Certificates either on
demand or in the event of a failed remarketing. The
amendments to the Series M-033 Series Certificate Agreement also
specifies that the Partnership has the option of terminating the
M-033 TEBS Financing on June 1, 2030. The Partnership
and Freddie Mac also amended the Bond Exchange Reimbursement,
Pledge and Security Agreement for each TEBS Financing to eliminate
the Partnership’s obligation to purchase interest rate caps, in
addition to making technical changes.
About America First Multifamily Investors,
L.P.
America First Multifamily Investors, L.P. was
formed on April 2, 1998 under the Delaware Revised Uniform Limited
Partnership Act for the primary purpose of acquiring, holding,
selling and otherwise dealing with a portfolio of mortgage revenue
bonds which have been issued to provide construction and/or
permanent financing for affordable multifamily, student housing and
commercial properties. The Partnership is pursuing a business
strategy of acquiring additional mortgage revenue bonds and other
investments on a leveraged basis. The Partnership
expects and believes the interest earned on these mortgage revenue
bonds is excludable from gross income for federal income tax
purposes. The Partnership seeks to achieve its
investment growth strategy by investing in additional mortgage
revenue.
Safe Harbor Statement
Information contained in this press release
contains “forward-looking statements,” which are based on current
expectations, forecasts and assumptions that involve risks and
uncertainties that could cause actual outcomes and results to
differ materially. These risks and uncertainties include, but are
not limited to, risks involving current maturities of our financing
arrangements and our ability to renew or refinance such maturities,
fluctuations in short-term interest rates, collateral valuations,
bond investment valuations and overall economic and credit market
conditions. For a further list and description of such risks, see
the reports and other filings made by the Partnership with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K for the year ended December 31, 2018. The
Partnership disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
CONTACT: Craig
Allen
Chief Financial
Officer
(800) 283-2357
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