atax-8k_20200806.htm
false 0001059142 0001059142 2020-08-06 2020-08-06

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 6, 2020

 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

000-24843

47-0810385

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

14301 FNB Parkway, Suite 211,

Omaha, Nebraska

 

68154

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (402) 952-1235

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Beneficial Unit Certificates representing assignments of limited partnership interests in America First Multifamily Investors, L.P.

 

ATAX

 

The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 


Item 7.01.  Regulation FD Disclosure.

On August 6, 2020, America First Multifamily Investors, L.P. (the “Partnership”) is providing the information which is included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) with respect to supplemental financial information for the Partnership on the Partnership’s website, www.ataxfund.com.  This information includes selected financial and operations information from the second quarter of 2020 and does not represent a complete set of financial statements and related notes prepared in conformity with generally accepted accounting principles (“GAAP”).  Most, but not all, of the selected financial information furnished herein is derived from the Partnership’s consolidated financial statements and related notes prepared in accordance with GAAP and management’s discussion and analysis of financial condition and results of operations included in the Partnership’s reports on Forms 10-K and 10-Q.  

The information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) that is furnished pursuant to this Item 7.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.  The information contained in this Item and in the accompanying Exhibit 99.1 shall not be incorporated by reference into any filing of the Partnership, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing.

 

 

Item 9.01.  Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) Exhibits.

 

Exhibit

Number

 

Description

99.1

 

Supplemental information furnished August 6, 2020.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

AMERICA FIRST MULTIFAMILY INVESTORS, L. P.

 

 

 

 

Dated: August 6, 2020

  

By:

/s/ Jesse A. Coury

 

 

 

Printed: Jesse A. Coury

 

 

 

Title: Chief Financial Officer

 

atax-ex991_6.htm

 

Exhibit 99.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Financial Report for the

Quarter Ended June 30, 2020

 


 

 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

All statements in this document other than statements of historical facts, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. When used, statements which are not historical in nature, including those containing words such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions, are intended to identify forward-looking statements. We have based forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. This document may also contain estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties contained in this supplement and, accordingly, we cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the headings “Item 1A Risk Factors” in our 2019 Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.  These forward-looking statements are subject to various risks and uncertainties and America First Multifamily Investors, L.P. (“ATAX” or “Partnership”) expressly disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Most, but not all, of the selected financial information furnished herein is derived from the America First Multifamily Investors, L.P.’s consolidated financial statements and related notes prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) and management’s discussion and analysis of financial condition and results of operations included in the Partnership’s reports on Forms 10-K and 10-Q. The Partnership’s annual consolidated financial statements were subject to an independent audit, dated February 26, 2020.

Disclosure Regarding Non-GAAP Measures

This document refers to certain financial measures that are identified as non-GAAP. We believe these non-GAAP measures are helpful to investors because they are the key information used by management to analyze our operations. This supplemental information should not be considered in isolation or as a substitute for the related GAAP measures.

Please see the consolidated financial statements we filed with the Securities and Exchange Commission on Forms 10-K and 10-Q.  Our GAAP consolidated financial statements can be located upon searching for the Partnership’s filings at www.sec.gov.

 

 

 

 


 

 

PARTNERSHIP FINANCIAL INFORMATION

TABLE OF CONTENTS

 

 

Pages

Supplemental Letter from the CEO

4

Quarterly Fact Sheet

5

Financial Performance Trend Graphs

6-11

Other Partnership Information

12

Partnership Financial Measures

13-14

 

 

 

 

 

 

 

 

 


 

 

AMERICA FIRST MULTIFAMILY INVESTORS L.P.

SUPPLEMENTAL LETTER FROM THE CEO

 

During the second quarter of 2020, ATAX focused on monitoring the impact of COVID-19 on our business and strengthening relationships with our business partners.  

 

We reported the following financial results as of and for the three months ended June 30, 2020:

 

 

Total revenues of approximately $14.5 million

 

Net income, basic and diluted, of $0.06 per Beneficial Unit Certificate (“BUC”)

 

Cash Available for Distribution of $0.09 per BUC

 

Total assets of approximately $1.0 billion

 

Total Mortgage Revenue Bond (“MRB”) investments of approximately $787.6 million

 

We reported the following notable transactions during the second quarter of 2020:

 

 

Acquired a Governmental Issuer Loan (“GIL”) for $40.0 million and leveraged the investment using $36.0 million of proceeds from a Tender Option Bond (“TOB”) Trust financing

 

Acquired 100% of the first mortgage MRBs on a single project for approximately $7.5 million

 

Received approximately $10.3 million of cash upon the sale of Vantage at Waco

 

Terminated five Term A/B Trust financings totaling approximately $43.7 million with Deutsche Bank and replaced with five new TOB Trust financings with Mizuho totaling approximately $55.4 million

 

Terminated the Master Trust Agreement with Deutsche Bank and are no longer subject to related debt covenants

In addition, in July 2020, the Partnership extended the maturity dates of all its TOB Trust financings scheduled to mature in 2021 to July 2023 and extended the maturity of its two unsecured lines of credit to June 2022. Both transactions provide us with long-term liquidity and provide flexibility in meeting our future contractual commitments.

 

The impacts of COVID-19 on the general economy and our operations continue to evolve. What we do know is that:

 

 

Our business partners remain open for business

 

We have access to capital markets as needed

 

All our multifamily MRBs are current on contractual principal and interest payments as of June 30, 2020

 

We have received no requests for forbearance on multifamily MRBs to date

 

There have been no supply chain disruptions for labor or building materials at the Vantage properties

 

Our team continue to perform at a high level while observing policies that align with recommendations and requirements of the U.S. Centers for Disease Control and Prevention

We are committed to navigating these uncertain times in the best interest of our unitholders.

 

Thank you for your continued support of ATAX!

 

/s/ Chad L. Daffer

Chad L. Daffer

Chief Executive Officer

 

4

 


 

 

SECOND QUARTER 2020 FACT SHEET

 

PARTNERSHIP DETAILS

 

ATAX was formed for the primary purpose of acquiring a portfolio of MRBs that are issued to provide construction and/or permanent financing of multifamily residential properties.  We continue to expect most of the interest paid on these MRBs to be excludable from gross income for federal income tax purposes.  In addition, we have invested in equity interests in multifamily, market rate projects throughout the U.S. We have also acquired interests in multifamily projects (“MF Properties”) to position ourselves for future investments in MRBs issued to finance these properties or to operate the MF Properties until their “highest and best use” can be determined.  We continue to pursue a business strategy of acquiring additional MRBs, on a leveraged basis, and other investments.

 

(As of June 30, 2020)

 

 

 

Symbol (NASDAQ)

 

 

ATAX

 

Most Recent Quarterly Distribution

 

$

0.06

 

Unit Price

 

$

4.12

 

 

 

 

 

 

 

 

 

 

 

BUCs Outstanding (including

   Restricted Units)

 

 

60,835,204

 

Market Capitalization

 

$

250,641,040

 

52-week BUC price range

 

$4.06 to $8.18

 

 

 

 

 

 

 

 

 

 

 

Partnership Financial Information for Q2 2020

($’s in 000’s, except per BUC amounts)

 

 

 

6/30/2020

 

12/31/2019

 

 

 

 

 

 

Total Assets

$1,038,489

 

$1,029,169

 

Leverage Ratio1

62%

 

61%

 

 

 

 

 

 

 

Q2 2020

 

    YTD 2020

 

 

 

 

 

 

Total Revenue

$14,478

 

$28,215

 

Net Income

$4,588

 

$7,570

 

Cash Available for Distribution

  (“CAD”)2

$5,701

 

$8,537

 

Distribution Declared per BUC3

$0.06

 

$0.185

 

 

 

 

 

 

 

 

 

 

 

 

 

1

Our overall leverage ratio is calculated as total outstanding debt divided by total assets using cost adjusted for paydowns and allowances for MRBs, governmental issuer loan, PHC Certificates, property loans, and taxable MRBs, and initial cost for deferred financing costs and MF Properties.

2

Management utilizes a calculation of Cash Available for Distribution (“CAD”) to assess the Partnership’s operating performance. This is a non-GAAP financial measure and a reconciliation of our GAAP net income to CAD is provided on page 13 of the Supplement herein.

3

The most recent distribution was paid on July 31, 2020 for BUC holders of record as of June 30, 2020. The distribution is payable to BUC holders of record as of the last business day of the quarter end and ATAX trades ex-dividend two days prior to the record date, with a payable date of the last business day of the subsequent month.

 

5

 


 

 

ATAX ASSET PROFILE

 

 

6

 


 

 

ATAX MORTGAGE INVESTMENT PROFILE

 

 

 

1 Mortgage Investments include the Partnership’s MRBs and Governmental issuer loan.

 

7

 


 

 

ATAX DEBT AND EQUITY PROFILE

 

 


 

8

 


 

 

DEBT FINANCING, NET ($’s in 000’s)

 

 

 

 

INTEREST RATE SENSITIVITY ANALYSIS1

 

Description

 

- 25 basis points

 

+ 50 basis points

 

+ 100 basis points

 

+ 150 basis points

 

+ 200 basis points

TOB Debt Financings

 

$290,319

 

$(580,639)

 

$(1,161,277)

 

$(1,741,916)

 

$(2,322,555)

TEBS Debt Financings

 

143,212

 

(286,424)

 

(572,848)

 

(859,272)

 

(1,145,696)

Other Investment Financings

 

35,854

 

(71,663)

 

(143,266)

 

(214,810)

 

(286,295)

Variable Rate Investments

 

(78,852)

 

157,704

 

315,407

 

473,111

 

630,815

Total

 

$390,533

 

$(781,022)

 

$(1,561,984)

 

$(2,342,887)

 

$(3,123,731)

 

 

1

Represents the change over the next 12 months assuming an immediate shift in rates and management does not adjust its strategy in response.

 

9

 


 

 

TOTAL REVENUE & GAIN ON SALE TRENDS

 

 

10

 


 

 

OPERATING EXPENSE TRENDS

 

 

 

 

 

 

Since July 1, 2018, the ratio of “Salaries and benefits” and “General and administrative” expenses to Total assets has averaged approximately 0.38% per quarter.

 

Salaries and benefits expense for the three months ended September 30, 2019 includes approximately $2.7 million of expense related to the accelerated vesting of restricted units upon the change in control of ATAX’s general partner on September 10, 2019.

 

11

 


 

 


OTHER PARTNERSHIP INFORMATION

 

 

 

 

Corporate Office:

 

 

Transfer Agent:

 

14301 FNB Parkway

 

 

American Stock Transfer & Trust Company

Suite 211

 

 

59 Maiden Lane

Omaha, NE  68154

 

 

Plaza Level

Phone:

402-952-1235

 

New York, NY 10038

Investor & K-1 Services:

855-4AT-AXK1

 

 

Phone: 718-921-8124

Web Site:

www.ataxfund.com

 

 

888-991-9902

K-1 Services Email:

k1s@ataxfund.com

 

 

 

Ticker Symbol:

ATAX

 

 

 

 

Corporate Counsel:

 

Independent Accountants:

Barnes & Thornburg LLP

 

PwC

11 S. Meridian Street

 

1 North Wacker Drive

Indianapolis, IN 46204

 

Chicago, Illinois 60606

 

 

 

Board of Managers of Greystone AF Manager, LLC:

(acting as the directors of ATAX)

 

 

 

Stephen Rosenberg

 

Chairman of the Board

Curtis A. Pollock

 

Manager

Jeffrey M. Baevsky

 

Manager

Drew C. Fletcher

 

Manager

Steven C. Lilly

 

Manager

Walter K. Griffith

 

Manager

William P. Mando, Jr.

 

Manager

 

 

 

Corporate Officers:

Chief Executive Officer – Chad L. Daffer

Chief Financial Officer – Jesse A. Coury

Chief Investment Officer - Kenneth C. Rogozinski

 

 

 

12

 


 

 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CASH AVAILABLE FOR DISTRIBUTION (CAD) AND OTHER PERFORMANCE MEASURES

 

The following table contains reconciliations of the Partnership’s GAAP net income to its CAD:

 

 

For the Three

 

 

For the Six

 

 

Months Ended

 

 

Months Ended

 

 

June 30, 2020

 

 

June 30, 2020

 

Partnership net income

$

4,588,348

 

 

$

7,570,105

 

Change in fair value of derivatives and interest

   rate derivative amortization

 

(93,647

)

 

 

(118,848

)

Depreciation and amortization expense

 

712,081

 

 

 

1,421,519

 

Reversal of impairment on securities

 

-

 

 

 

(1,902,979

)

Provision for credit loss

 

464,675

 

 

 

1,822,356

 

Impairment charge on real estate assets

 

25,200

 

 

 

25,200

 

Amortization of deferred financing costs

 

432,118

 

 

 

791,026

 

Restricted units compensation expense

 

296,268

 

 

 

335,336

 

Deferred income taxes

 

(960

)

 

 

(31,881

)

Redeemable Series A Preferred Unit distribution

   and accretion

 

(717,762

)

 

 

(1,435,525

)

Tier 2 Income distributable (Loss allocable) to

   the General Partner

 

-

 

 

 

80,501

 

Bond purchase premium (discount) amortization

   (accretion), net of cash received

 

(5,761

)

 

 

(19,567

)

Total CAD

$

5,700,560

 

 

$

8,537,243

 

 

 

 

 

 

 

 

 

Weighted average number of BUCs outstanding, basic

 

60,545,204

 

 

 

60,649,692

 

 

 

 

 

 

 

 

 

Partnership Only:

 

 

 

 

 

 

 

Net income per BUC, basic

$

0.06

 

 

$

0.10

 

Total CAD per BUC, basic

$

0.09

 

 

$

0.14

 

Distributions declared per BUC

$

0.06

 

 

$

0.185

 

 


 

13

 


 

 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

TAX INCOME INFORMATION RELATED TO BENEFICIAL UNIT CERTIFICATES

 

The following table summarizes tax-exempt and taxable income as percentages of total income allocated to the Partnership’s BUCs on Schedule K-1 for tax years 2017 to 2019. This disclosure relates only to income allocated to the Partnership’s BUCs and does not consider an individual unitholder’s basis in the BUCs or potential return of capital as such matters are dependent on the individual unitholders’ specific tax circumstances.

 

 

 

2019

 

2018

 

2017

Tax-exempt income

37%

 

41%

 

62%

Taxable income

63%

 

59%

 

38%

 

100%

 

100%

 

100%

 

 

 

 

 

 

 

 

14