America First Multifamily Investors, L.P. Announces Issuance of Secured Notes to Mizuho

OMAHA, Neb., Sept. 30, 2020 (GLOBE NEWSWIRE) -- On September 30, 2020, America First Multifamily Investors, L.P. (the “Partnership”), announced that the Partnership and its affiliate, ATAX TEBS Holdings, LLC (the “Issuer”), have entered into a number of agreements pursuant to which the Issuer issued $103.5 million aggregate principal amount of Taxable Secured Notes 2020 Series A (the “Notes”) to Mizuho Capital Markets LLC (“Mizuho”). The Notes are secured by the Partnership’s residual certificates associated with the trusts that issued the Freddie Mac Multifamily Variable Rate Certificates Series M-024, Freddie Mac Multifamily M Certificates Series M-031, Freddie Mac Multifamily M Certificates Series M-033, and Freddie Mac Multifamily M Certificates Series M-045 (collectively, the “Class B Certificates”). The Class B Certificates represent the Partnership’s beneficial interests in the securitized assets held by the Federal Home Loan Mortgage Corporation (“Freddie Mac”) pursuant to Freddie Mac’s Tax-Exempt Bond Securitization (“TEBS”) program.

The Notes have an initial principal balance of $103.5 million. The Notes bear interest at a variable rate equal to the 3-month London Inter-Bank Offered Rate (“LIBOR”) plus 9.00% payable monthly. Interest due on the Notes and TRS transactions will be paid from receipts related to the Class B Certificates. Concurrent with the issuance of the Notes, the Partnership entered into two Total Return Swap (“TRS”) transactions with Mizuho. Under the TRS transactions, the Partnership has agreed to make periodic payments to Mizuho based on a variable rate of interest during a specified period, in return for periodic payments by Mizuho to the Partnership based on the interest due on the Notes. The TRS transactions have the effect of reducing the Partnership’s net interest cost associated with the Notes. The first TRS transaction, with an initial notional amount of $40 million, reduces the Partnership’s net interest cost to a rate equal to 3-month LIBOR plus 3.75%, with an interest rate floor of 4.25%. The second TRS transaction, with an initial notional amount of $63.5 million, reduces the Partnership’s net interest cost to a rate equal to 3-month LIBOR plus 0.50%, with an interest rate floor of 1.00%. Through March 2022, the Issuer has the option to allocate notional amounts from the second TRS transaction to the first TRS transaction, in minimum increments of $10 million, and receive net cash proceeds of approximately 65% of the reallocated notional amount.