America First Multifamily Investors, L.P. Announces Closing of New Fixed-Rate Secured Debt Financing Facility
August 09 2018 - 8:30AM
On August 8, 2018, America First Multifamily Investors, L.P. (the
“Partnership”), and its affiliate, ATAX TEBS IV, LLC, entered into
a number of agreements relating to a new long-term debt financing
facility provided through the securitization of 25 of the
Partnership’s mortgage revenue bonds (the “Bonds”) with the Federal
Home Loan Mortgage Corporation (“Freddie Mac”) pursuant to Freddie
Mac’s Tax-Exempt Bond Securitization program, also known as the
“TEBS” program (the “TEBS Financing”). The gross proceeds from the
TEBS Financing were approximately $221.5 million. After payment of
transaction costs and retirement of the previously existing Term
A/B Trusts associated with the Bonds, the Partnership received net
proceeds from the TEBS Financing of approximately $12.6 million.
The Partnership used approximately $12.6 million of the net
proceeds to reduce the outstanding principal of, and accrued
interest on, its unsecured line of credit with Banker’s Trust that
was previously used by the Partnership as short-term financing to
fund the purchase of a Bond in the second quarter of 2018.
The TEBS Financing provides the Partnership with
a long-term fixed-rate debt facility at interest rates of 3.08% per
annum commencing on August 8, 2018 through July 31, 2023, and 3.65%
per annum commencing on August 1, 2023 through the expiration date
of July 31, 2034. Under the TEBS Financing, the Partnership
transferred the 25 Bonds, with a total outstanding principal
balance of approximately $260.6 million, to ATAX TEBS IV, LLC, a
special purpose entity owned and controlled by the Partnership (the
“Sponsor”). The Bonds were securitized by transferring these assets
to Freddie Mac in exchange for Class A and Class B Freddie Mac
Multifamily Fixed-Rate Certificates, Series M-045, (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 were issued
in an initial principal amount of approximately $221.5 million and
were sold to an unaffiliated investor. The Class B TEBS
Certificates were issued in an initial principal amount of
approximately $39.1 million and were retained by the Sponsor. The
holders of the Class A TEBS Certificates are entitled to
receive regular payments of interest from Freddie Mac at a fixed
rate. Freddie Mac is entitled to receive certain credit and
servicing fees (“Facility Fees”) at a rate of approximately 0.74%
per annum. The total cost of this financing facility is
approximately 3.82%, through July 31, 2023, and 4.39% from August
1, 2023 through July 31, 2034.
Payment of interest on the Class A TEBS
Certificates 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 Sponsor is 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 Bonds held by Freddie Mac after payment of
principal and interest due on the Class A TEBS Certificates
and payment of all Facility Fees and associated expenses.
“The closing of our fourth TEBS Financing
represents another significant milestone for the Partnership,” said
Chad Daffer, Chief Executive Officer of America First Multifamily
Investors, L.P. “We have been able to lock in
fixed-rate, long-term financing that will protect the Partnership
against rising interest rates. This will allow us to continue
to execute on our strategies for the benefit of our
Unitholders.”
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 bonds and other investments as permitted by the
Partnership’s Amended and Restated Limited Partnership Agreement,
dated September 15, 2015, taking advantage of attractive financing
structures available in the securities market, and entering into
interest rate risk management instruments. America First
Multifamily Investors, L.P. press releases are available at
www.ataxfund.com.
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, 2017. 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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