As of and for the three months ended
- Total revenues of
- Net income, basic and diluted, of
- Cash Available for Distribution (“CAD”) of
- Total assets of
- Total Mortgage Revenue Bond (“MRB”) and Governmental Issuer Loan (“GIL”) investments of
The Partnership reported the following notable transactions during the first quarter of 2022:
- Received proceeds from the sale of Vantage at
Murfreesboroin Tennesseetotaling $29.3 millionon the Partnership’s initial investment commitment of $12.2 millionin September 2018. The Partnership realized investment income and a gain on sale totaling $17.0 millionupon sale.
- Advanced funds for six GIL investment commitments totaling
$16.9 millionand five related property loan investment commitments totaling $38.4 million. Such investments were partially funded with additional Tender Option Bond (“TOB”) trust financing proceeds of $48.6 million.
- Completed a restructuring of the outstanding debt of the Live 929 Apartments in
Baltimore, MD. The restructuring transaction provided additional funds to resolve certain accounts payable at the property, fund a debt service reserve, perform repairs and capital improvements, and improve the property’s debt service coverage going forward. The Partnership’s two existing MRB investments with principal totaling $61.1 millionwere redeemed at par plus accrued interest and the Partnership purchased a new MRB and taxable MRB with principal totaling $70.0 million, which was partially funded with $56.0 millionof proceeds from a new TOB trust financing with Mizuho.
- Advanced equity totaling
$12.8 millionfor five joint venture equity investments.
- Executed two interest rate swap agreements to synthetically fix the Partnership’s interest rate on TOB trust financings in notional amounts totaling
Investment Updates and Management Remarks
The Partnership announced the following updates regarding its investment portfolio:
- All affordable multifamily MRB investments are current on contractual principal and interest payments as of
March 31, 2022and the Partnership has received no requests for forbearance of contractual principal and interest payments from borrowers of the MRB investments.
- Four Vantage property investments are over 90% occupied as of
March 31, 2022, with another property at 89% occupancy. Six additional Vantage property investments are currently under construction or in development and none have experienced material supply chain disruptions for either construction materials or labor to date.
- The Live 929 Apartments MRB property is 98% occupied as of
March 31, 2022, which exceeds pre-COVID occupancy levels. The nearby university, Johns Hopkins University, continues to hold on-campus, in-person classes.
- The Partnership’s two owned student housing properties, The 50/50 MF Property (near the
University of Nebraska-Lincoln) and the Suites on Paseo MF Property (near San Diego State University), continue to meet all direct mortgage and operating obligations with cash flows from operations. The 50/50 MF Property is 88% occupied and the Suites on Paseo MF Property is 93% occupied as of March 31, 2022.
- The borrower for the Partnership’s only commercial MRB property, the Provision Center, is continuing to progress toward a bankruptcy court-approved sale of the property. The Partnership expects to receive its proportional share of final sale proceeds and other funds held under the lien of the bond indenture upon completion of the sale and final termination of the MRBs.
“Despite recent volatility in interest rates, we continue to strategically invest in our affordable multifamily and joint venture equity asset classes where we believe we can earn attractive leveraged returns,” said
“We also opportunistically executed on new interest rate hedges to offset the risk associated with our floating rate financing costs. Finally, we believe the Reverse Unit Split, which had no monetary impact on our unitholders, will help the Partnership continue to grow and will be a net benefit to our unitholders by expanding the universe of potential investors and enhancing the ability of unitholders to purchase or hold BUCs through margin accounts,” said Rogozinski.
Disclosure Regarding Non-GAAP Measures
This report refers to Cash Available for Distribution (“CAD”), which is identified as a non-GAAP financial measure. We believe CAD provides relevant information about our operations and is necessary, along with net income, for understanding our operating results. Net income is the GAAP measure most comparable to CAD. There is no generally accepted methodology for computing CAD, and our computation of CAD may not be comparable to CAD reported by other companies. Although we consider CAD to be a useful measure of our operating performance, CAD is a non-GAAP measure and should not be considered as an alternative to net income that is calculated in accordance with GAAP, or any other measures of financial performance presented in accordance with GAAP. See the table at the end of this press release for a reconciliation of our net income as determined in accordance with GAAP and our CAD for the periods set forth.
Earnings Webcast & Conference Call
The Partnership will host a Webcast & Earnings Call for Unitholders on
- Participants can register for access to the live broadcast in listen-only mode using the following link: https://edge.media-server.com/mmc/p/63csxtvo for registration on
Thursday, May 5, 2022, approximately 30 minutes prior to the start of the earnings call, or
- Participants wanting to ask questions may dial toll free (855) 854-0934 (International Participants may dial (720) 634-2907) using Conference ID# 7691848. Please place your call at least 15 minutes prior to the start of the earnings call to ensure a timely connection. The operator will open the lines for questions at the conclusion of management’s presentation.
Following completion of the earnings call, a recorded replay will be available on the Partnership’s Investor Relations website at www.ataxfund.com.
Safe Harbor Statement
Certain statements in this press release are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of statements that include, but are not limited to, phrases such as “believe,” “expect,” “future,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “should,” “will,” “estimates,” “potential,” “continue,” or other similar words or phrases. Similarly, statements that describe objectives, plans, or goals also are forward-looking statements. Such forward-looking statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Partnership. The Partnership cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, implied, or projected by such forward-looking statements. Risks and uncertainties include, but are not limited to: defaults on the mortgage loans securing our mortgage revenue bonds and governmental issuer loans; the competitive environment in which the Partnership operates; risks associated with investing in multifamily, student, senior citizen residential properties and commercial properties; general economic, geopolitical, and financial conditions, including the current and future impact of changing interest rates, inflation, international conflicts, and the novel coronavirus (“COVID-19”) on business operations, employment, and financial conditions; the Partnership’s ability to access debt and equity capital to finance its assets; current maturities of the Partnership’s financing arrangements and the Partnership’s ability to renew or refinance such financing arrangements; potential exercising of redemption rights by the holders of the Series A Preferred Units; local, regional, national and international economic and credit market conditions; recapture of previously issued Low Income Housing Tax Credits in accordance with Section 42 of the Internal Revenue Code; geographic concentration within the mortgage revenue bond and governmental issuer loan portfolio held by the Partnership; changes in the Internal Revenue Code and other government regulations affecting the Partnership’s business; and the other risks detailed in the Partnership’s
If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, the developments and future events concerning the Partnership set forth in this press release may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this document. We anticipate that subsequent events and developments will cause our expectations and beliefs to change. The Partnership assumes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, unless obligated to do so under the federal securities laws.
Cash Available for Distribution (“CAD”)
The following table shows the calculation of CAD (and a reconciliation of the Partnership’s net income, as determined in accordance with GAAP, to CAD) for the three months ended
|For the Three Months Ended
|Change in fair value of derivatives||(2,475,131||)||(7,451||)|
|Depreciation and amortization expense||683,662||683,460|
|Amortization of deferred financing costs||451,472||206,386|
|Restricted unit compensation expense||173,898||78,114|
|Deferred income taxes||7,266||(16,228||)|
|Redeemable Preferred Unit distributions and accretion||(717,744||)||(717,763||)|
|Tier 2 Income allocable to the General Partner(1)||(2,645,979||)||(702,277||)|
|Recovery of prior credit loss(2)||(5,279||)||-|
|Bond purchase premium (discount) amortization (accretion), net of cash received||(78,375||)||(18,521||)|
|Weighted average number of BUCs outstanding, basic||22,016,636||20,230,287|
|Net income per
|Total CAD per
|Distributions declared, per
1. As described in Note 3 to the Partnership’s condensed consolidated financial statements, Net Interest Income representing contingent interest and Net Residual Proceeds representing contingent interest (Tier 2 income) will be distributed 75% to the limited partners and
For the three months ended
2. The Partnership compared the present value of cash flows expected to be collected to the amortized cost basis of the Live 929 Apartments Series 2022A MRB as of
Source: America First Multifamily Investors, L.P.