(2) | |
The proposed maximum aggregate offering price has been estimated solely to calculate the registration fee in accordance with Rule 457(o) under the Securities Act of |
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a)OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), may determine.
SUBJECT TO COMPLETION, DATED SEPTEMBER 5, 2013
PROSPECTUS
$225,000,000
Beneficial Unit Certificates Representing Assigned Limited Partnership Interests
We may use this prospectus to offer, sharesfrom time to time, beneficial unit certificates representing assigned limited partnership interests (“Units” or “BUCs”) in America First Tax ExemptMultifamily Investors, L.P. We may offer these shares from time to time. We will provide specific terms of each issuance of these securities in supplements to this prospectus. You should read this prospectus and any supplement carefully before you decide to invest in our shares.
Our sharesUnits are quotedtraded on the NASDAQ Global Select Market under the symbol “ATAX.” Our principal executive offices are located at 1004 Farnam Street, Suite 400, Omaha, Nebraska, 68102. Our telephone number is (402) 444-1630.
We may offer and sell these securities to or through one or more underwriters, dealers, and agents in amounts, at prices, and at terms to be determined by market conditions and other factors at the time of the offering. This prospectus provides you with a general description of the securities we may offer. Each time we offer to sell securities we will provide a prospectus supplement that will contain specific information about those securities and the terms of that offering. The prospectus supplement also may add, update, or change information contained in this prospectus. If agents or any dealers or underwriters are involved in the sale of the securities, the applicable prospectus supplement will set forth the names of the agents, dealers, or underwriters and any applicable commissions or discounts. Net proceeds from the sale of securities will be set forth in the applicable prospectus supplement. For general information about the distribution of securities offered, please see “Plan of Distribution” in this prospectus.
This prospectus may be used to offer and sell securities only if accompanied by a prospectus supplement. You should read this prospectus and any prospectus supplement carefully before you invest. You should also read the documents we refer to in the “Where You Can Find More Information” section of this prospectus for information on us and our financial statements.
Investing in our sharesUnits involves a high degree of risk. You should carefully consider the information under the heading “RISK FACTORS”“Risk Factors” beginning on page 98 of this prospectus, and contained in any applicable prospectus supplement and in the documents incorporated by reference herein and therein, before buying our shares.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.The date of this prospectus is , 2013
Page No. | ||
ABOUT THIS PROSPECTUS | 1 | |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | 2 | |
ABOUT AMERICA FIRST MULTIFAMILY INVESTORS, L.P | 3 | |
RISK FACTORS | 8 | |
USE OF PROCEEDS | 8 | |
THE PARTNERSHIP AGREEMENT | 9 | |
DESCRIPTION OF THE UNITS | 18 | |
U.S. FEDERAL INCOME TAX CONSIDERATIONS | 19 | |
ERISA CONSIDERATIONS | 28 | |
PLAN OF DISTRIBUTION | 30 | |
LEGAL MATTERS | 31 | |
EXPERTS | 31 | |
WHERE YOU CAN FIND MORE INFORMATION | 31 | |
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE | 32 |
You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement or any “free writing prospectus” we may authorize to be delivered to you. We have not authorized anyone else to provide you with different information or to make additional representations. We are not making or soliciting an offer of any securities other than the securities described in this prospectus and any prospectus supplement. We are not making or soliciting an offer of these securities in any state or jurisdiction where an offer is not permitted or in any circumstances in which such offer or solicitation is unlawful. You should not assume that the information contained or incorporated by reference in this prospectus andor any related prospectus supplement. supplement is accurate as of any date other than the date on the front cover of each of those documents.
We have not authorized anyone to provide you with information or to make any representation that differs from the information in this prospectus and any related prospectus supplement. If anyone provides you with different or inconsistent information, you should not rely on it. You should not assumefurther note that the information containedrepresentations, warranties, and covenants made by us in this prospectus, any related prospectus supplement and the documentsagreement that is filed as an exhibit to any document that is incorporated by reference herein is correct on any date after their respective dates even though this prospectus and any related prospectus supplement are delivered or shares are sold pursuant to this prospectus and a related prospectus supplement at a later date. Our business, financial condition, results of operations or prospects may have changed since those dates. To the extent the information contained in this prospectus or the documents incorporated by reference herein differs or varies from the information contained in any prospectus supplement deliveredwere made solely for the benefit of the parties to you,such agreement and the informationthird-party beneficiaries named therein, if any, including, in some cases, for the purpose of allocating risk among the parties to such prospectus supplement will supersedeagreements, and should not be deemed to be a representation, warranty, or covenant to you. Moreover, such information.
representations, warranties, or covenants were accurate only as of the date when made. Accordingly, such representations, warranties, and covenants should not be relied on as accurately representing the current state of our affairs.
i
This prospectus is part of a “shelf” registration statement on Form S-3 that we filed with the Securities and Exchange Commission, (or “SEC”) using a “shelf”or SEC. Under the shelf registration process. Under this process, we may offer and sell shares representing assigned limited partnership interestsup to $225,000,000 in our companytotal aggregate offering price of Units, as described in this prospectus, in one or more offerings for total proceeds of up to $225,000,000. offerings.
This prospectus provides you with a general description of our businessus and the shares that we may offer.securities offered under this prospectus. Each time we offer to sell any shares,securities under this prospectus, we will provide a prospectus supplement to this prospectus that will contain specific information about the terms of that offering.offering and the securities being offered. The prospectus supplement also may also add to, update, or change the information contained in this prospectus. ItIf there is important for you to considerany inconsistency between the information contained in this prospectus and any information incorporated by reference in this prospectus, on the one hand, and the information contained in any applicable prospectus supplement together withor incorporated by reference therein, on the other hand, you should rely on the information in the applicable prospectus supplement or incorporated by reference in the prospectus supplement. You should read carefully this prospectus, any prospectus supplement, and the additional information described below under the heading “WHERE YOU CAN FIND MORE INFORMATION.“Where You Can Find More Information.”
Wherever references are made in this prospectus to information that will be included in a prospectus supplement, to the extent permitted by applicable law, rules, or regulations, we may instead include such information or add, update, or change the information contained in this prospectus by means of a post-effective amendment to the registration statement, of which this prospectus is a part, through filings we make with the SEC that are incorporated by reference into this prospectus or by any other method as may then be permitted under applicable law, rules, or regulations.
Statements made in this prospectus, in any prospectus supplement or in any document incorporated by reference in this prospectus or any prospectus supplement as to the contents of any contract or other document are not necessarily complete. In each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement of which this prospectus is a part, or as an exhibit to the documents incorporated by reference. You may obtain copies of those documents as described in this prospectus under “Where You Can Find More Information.”
Neither the delivery of this prospectus nor any sale made hereunder implies that there has been no change in our affairs or that the information in this prospectus is correct as of any date after the date of this prospectus. You should not assume that the information in this prospectus, including any information incorporated in this prospectus by reference, an accompanying prospectus supplement, or any “free writing prospectus” we may authorize to be delivered to you, is accurate as of any date other than the date on the front cover of each of those documents. Our business, financial condition, results of operations, and prospects may have changed since that date.
Throughout this prospectus, when we use the terms “we,” “us,” or the “Partnership,” we are referring to America First Multifamily Investors, L.P. References in this prospectus to our “General Partner” refer to America First Capital Associates Limited Partnership 2, which is a subsidiary of Burlington Capital, LLC (“Burlington Capital”).
This prospectus contains or incorporates by reference certain forward-looking statements. All statements other than statements of historical facts contained in this prospectus, 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 prospectus also contains 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 andwhich are contained in this prospectus 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 “RISK FACTORS” beginning on page 9 ofheading “Risk Factors” in this prospectus and page 10 ofthose described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.2015 and our Form 10-Q filed for the quarterly period ending March 31, 2016. These forward-looking statements are subject to various risks and uncertainties, including but not limited to those relating to:
current maturities of our financing arrangements and our ability to renew or refinance such financing arrangements;arrangement;
defaults on the mortgage loans securing our tax-exempt mortgage revenue bonds;
the competitive environment in which we operate;
risks associated with investing in multifamily, apartments,student, senior citizen residential and commercial properties, including changes in business conditions and the general economy;
the general level of interest rates;
our ability to use borrowings or obtain capital to finance our assets;
local, regional, national, and international economic and credit market conditions;
recapture of previously issued Low Income Housing Tax Credits (“LIHTCs”) in accordance with Section 42 of the Internal Revenue Code;
changes in the United States Department of Housing and Urban Development'sDevelopment’s Capital Fund Program;Program (“HUD”);
appropriations risk related to funding of federal housing programs, including HUD Section 8; and
changes in government regulations affecting our business.
Other risks, uncertainties, and factors, including those discussed in any supplement to this prospectus or in the reports that we file from time to time with the Securities and Exchange Commission (such as our Forms 10-K and 10-Q) could cause our actual results to differ materially from those projected in any forward-looking statements we make. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Our Business
America First Tax Exempt Investors, L.P. The "Company" is the consolidation of the Partnership and its VIEs segment (as defined below).
We have been in operation since 1998 and as of June 30, 2013, owned 31 federally tax-exemptown 62 mortgage revenue bonds with an aggregate outstanding principal amountcost adjusted for paydowns of approximately $229 million. These$534.7 million as of September 30, 2016. The majority of these bonds were issued by various state and local housing authorities in order to provide construction and/or permanent financing of 20 multifamily residential apartmentsfor 49 Residential Properties containing a total of 3,8808,915 rental units located in the states of California, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky,Louisiana, Maryland, Minnesota, New Mexico, North Carolina, Ohio, South Carolina, Tennessee, and Texas. In each case the Partnership owns, either directly or indirectly, 100%One bond is collateralized by commercial real estate located in Tennessee. Sixty-one of the mortgage revenue bonds issued for these properties. Eachare secured by mortgages or deeds of trust on the Residential Properties and one mortgage revenue bond is secured by a mortgage or deed of trust on the financed apartment property.commercial real estate. Each of the bonds provides for "base"“base” interest payable at a fixed rate on a periodic basis. Additionally, five of the bonds may also provide for the payment of contingent interest determined by the net cash flow and net capital appreciation of the underlying real estate properties. As a result, these mortgage revenue bonds provide the Partnershipus with the potential to participate in future increases in the cash flow generated by the financed properties, either through operations or from their ultimate sale. Of the 3162 bonds owned, 1214 are owned directly by the Partnership, 1310 bonds are owned by ATAX TEBS I, LLC, 13 bonds are owned by ATAX TEBS II, LLC, 9 bonds are owned by ATAX TEBS III, LLC, each a special purpose entity owned and controlled by the Partnership,us, created to facilitate a Tax Exempt Bond Securitization (“TEBS”TEBS”) Financing with Federal Home Loan Mortgage Corporation also known as "Freddie Mac"Freddie Mac, and six16 are securitized and held by Deutsche Bank ("DB"AG (“DB”) in Tender Option Bond ("(“TOB Trust"”) financing facilities.
The ability of the properties collateralizingResidential Properties and the commercial property which collateralize our tax-exempt mortgage revenue bonds to make payments of base and contingent interest is a function of the net operating income generated by these properties. Net operating income from a multifamily, student, or senior citizen residential property depends on the rental and occupancy rates of the property and the level of operating expenses. Occupancy rates and rents are directly affected by the supply of, and demand for, apartments in the market areas in which a property is located. This, in turn, is affected by several factors such as the requirement that a certain percentage of the rental units be set aside for tenants who qualify as persons of low to moderate income, local or national economic conditions, and the amount of new apartment construction and interest rates on single-family mortgage loans. In addition, factors such as government regulation, inflation, real estate and other taxes, labor problems and natural disasters can affect the economic operations of a property. Because theThe return to the Partnershipwe realize from itsour investments in tax-exempt mortgage revenue bonds depends upon the economic performance of the multifamily residential propertiesResidential Properties and the commercial property which collateralize these bonds, the Partnershipbonds. We may be considered to be in competition with other multifamilyresidential rental properties and commercial properties located in the same geographic areas as the properties financed with its tax-exemptour mortgage revenue bonds.
receipts evidencing loans made to a number of public housing authorities. Principal and interest on these loans are payable by the respective public housing authorities out of annual appropriations to be made to the public housing authorities by the United States Department of Housing and Urban Development (“HUD”)HUD under HUD'sits Capital Fund Program established under the Quality Housing and Work Responsibility Act of 1998 (the “Capital“Capital Fund Program”Program”). The PHC Trusts have a first lien on these annual Capital Fund Program payments to secure the public housing authorities'authorities’ respective obligations to pay principal and interest on their loans. The state issued MBS had an aggregate principal outstanding of $43.5 million as of June 30, 2013 and have been securitized into six separate TOB Trusts with DB. The MBS are backed by residential mortgage loans and have investment grade ratings by the most recent S&P or Moody's rating.
We may also make taxable mortgageproperty loans secured by multifamily propertiesthe Residential Properties which are financed by tax‑exempt mortgage revenue bonds held by the Partnership.us in addition to other direct loans made to other properties. We do thismake these loans in order to provide financing for capital improvements at these properties or to otherwise support property operations when we determine it is in theour best long-term interest of the Partnership.
We may acquire direct interests in real property as long term or permanent investments. The Partnershipmultifamily, student, and senior citizen apartment properties (“MF Properties”) in order to position ourselves for future investments in bonds issued to finance these properties and which we expect and believe will generate tax-exempt interest. We currently hold interests in seven MF Properties containing 2,004 rental units, of which one is located in Nebraska, one in Florida, one in Kentucky, one in Indiana, one in California, and two in Texas. In addition, we may however, acquire real estate securing its tax-exemptour mortgage revenue bonds or taxable mortgageproperty loans through foreclosure in the event of a default. In addition, the Partnership may acquire interests in multifamily apartment properties (“MF Properties”) in order to position itself for future investments in tax-exempt bonds issued to finance these properties. The Partnership currently holds interests in eight MF Properties containing 1,582 rental units,
To restructure each of which two are located in Nebraska, one is located in Kansas, one is located in Kentucky, one is located in Indiana, one is located in Georgia, and two are located in Texas. The Partnership also has a student housing development under construction at the University of Nebraska - Lincoln, which is expected to be completed in the third quarter of 2014. The Greens Property was previously reported in MF Properties but is now reported as discontinued operations as a result of the sale of the Partnership's interest in this property in connection with the acquisition of the tax-exempt mortgage revenue bonds secured by this property.
Business Objectives and Strategy
Our business objectives are to (i) preserve and protect our capital, and (ii) provide regular and increasing cash distributions to our shareholdersUnitholders which we expect and believe are substantially exempt from federal income tax.tax, and (iii) generate additional returns from appreciation of real estate or the opportunistic sale of the asset investments. We have sought to meet these objectives by primarily investing in a portfolio of tax-exempt mortgage revenue bonds that were issued to finance, and are secured by first mortgages on, multifamily, apartment properties, including student, housing.and senior citizen residential properties. Certain of these bonds may be structured to provide a potential for an enhanced federally tax-exempt yield through the payment of contingent interest which is payable out of net cash flow from operations and net capital appreciation of the financed apartmentmultifamily residential properties.
We are pursuing a business strategy of acquiring additional tax-exempt mortgage revenue bonds and other investments on a leveraged basis in order to (i) increase the amount of tax-exempt interest available for distribution to our shareholders;Unitholders; (ii) reduce risk through asset diversification and interest rate hedging; and (iii) achieve economies of scale. We are pursuing this growth strategy by investing in additional tax-exempt mortgage revenue bonds and relatedother investments as permitted by the Partnership Agreement, taking advantage of attractive financing structures available in the tax-exempt securities market, and entering into interest rate risk management instruments. We may finance the acquisition of additional tax-exempt mortgage revenue bonds and other investments through the reinvestment of cash flow, the issuance of additional shares,Units and partnership interests, lines of credit, or securitization financing using our existing portfolio of tax-exempt mortgage revenue bonds. Our current operating policy is to use securitizations or other forms of leverage to maintain a level of debt financing between 40% and 60%which will not exceed 65% of the total par value of our mortgage bond portfolio. At June 30, 2013, the leverage on the portfolio of the tax-exempt mortgage revenue bonds was approximately 60% ofPartnership assets. The assets are defined as the par value of the portfolio.
In connection with our growthbusiness strategy, we are also assessingcontinually assess opportunities to reposition our existing portfolio of tax-exempt mortgage revenue bonds. The principal objective of this repositioning initiativeassessment is to improve the quality and performance of our revenue bond portfolio and, ultimately, increase the amount of cash available for distribution to our shareholders. Unitholders. In some cases, we may elect to redeem selected tax-exemptmortgage revenue bonds that are secured by multifamily properties that have experienced significant appreciation. Through the selective redemption of the bonds, a sale or refinancing of the underlying property will be required which, if sufficient sale or refinancing proceeds exist, may entitle the Partnershipus to receive payment of contingent interest on itsour bond investment. In other cases, we may elect to sell bonds on properties that are in stagnant or declining markets. The proceeds received from these transactions would be redeployed into other tax‑exempt investments consistent with our investment objectives. We may also be able to use a higher-quality investment portfolio to obtain higher leverage to be used to acquire additional investments.
In executing our growth strategy, we expect to invest primarily in bonds issued to provide affordable rental housing, but may also consider bonds issued to finance student housing projects, and housing for senior citizens.citizens, and commercial property. In this regard, a majority of our aggregate investments, based upon aggregate dollars invested, are intended to qualify as public welfare investments as defined in 12 C.F.R. § 24.3. The four basic types of multifamily housingmortgage revenue bonds which we may acquire as investments are as follows:
1. | Private activity bonds issued under Section 142(d) of the Internal Revenue Code; |
2. | Bonds issued under Section 145 of the Internal Revenue Code by not-for-profit entities qualified under Section 501(c)(3) of the Internal Revenue Code; |
3. | Essential function bonds issued by a public instrumentality to finance |
4. | Existing “80/20 bonds” that were issued under Section 103(b)(4)(A) of the Internal Revenue Code of 1954. |
Each of these bond structures permits the issuance of tax-exemptmortgage revenue bonds to finance the construction or acquisition and rehabilitation of affordable rental housing.housing or other not-for-profit commercial property. Under applicable Treasury Regulations, any affordable apartmentmultifamily residential project financed with mortgage revenue bonds that are purportedly tax-exempt bonds must set aside a percentage of its total rental units for occupancy by tenants whose incomes do not exceed stated percentages of the median income in the local area. In each case, the balance of the rental units in the apartmentmultifamily residential project may be rented at market rates.rates (unless otherwise restricted by local housing authorities). With respect to private activity bonds issued under Section 142(d) of the Internal Revenue Code, the owner of the apartmentmultifamily residential project may elect, at the time the bonds are issued, whether to set aside a minimum of 20% of the units for tenants making less than 50% of area median income (as adjusted for household size) or 40% of the units for tenants making less than 60% of the area median income (as adjusted for household size). Multifamily housingThe mortgage revenue bonds that were secured by Residential Properties issued prior to the Tax Reform Act of 1986 (so called “80/20” bonds) require that 20% of the rental units be set aside for tenants whose income does not exceed 80% of the area median income, without adjustment for household size.
We expect that many of the private activity housing bonds that we evaluate for acquisition will be issued in conjunction with the syndication of LIHTCs by the owner of the financed apartmentmultifamily residential project. Additionally, to facilitate our investment strategy of acquiring additional tax-exempt mortgage revenue bonds secured by MF Properties, we may acquire ownership positions in the MF Properties. We expect to acquire tax-exempt mortgage revenue bonds on these MF Properties in many cases at the time of a restructuring of the MF Property ownership. Such restructuring may involve the syndication of LIHTCs in conjunction with a property rehabilitation.
Mortgage Revenue Bonds.The Partnership invests We invest in tax-exempt mortgage revenue bonds that are secured by a first mortgage or deed of trust on multifamily apartment projects.Residential Properties and a commercial property. Each of these bonds bears interest at a fixed annual base rate. FiveTwo of the mortgage revenue bonds currently owned by the Partnershipus also provide for the payment of contingent interest, which is payable out of the net cash flow and net capital appreciation of the underlying apartmentmultifamily residential properties. As a result, the amount of interest earned by the Partnershipus from itsour investment in tax-exempt mortgage revenue bonds is a function of the net operating income generated by the properties collateralizingResidential Properties and the tax-exemptcommercial property which collateralize the mortgage revenue bonds. Net operating income from a multifamily residential property depends on the rental and occupancy rates of the property and the level of operating expenses.
Other Tax-Exempt Securities.
PHC Certificates ("PHC Certificates")
Other Investments. The PartnershipWe also invests in state-issued MBS that are backed by residential mortgage loans. The MBS held by the Partnership are rated investment grade by Standard & Poor's or Moody'shave a reportable segment consisting of ATAX Vantage Holdings, LLC, which, as of JuneSeptember 30, 2013.2016, is invested in the Vantage Properties, and has issued property notes receivable due from Vantage at Brooks LLC and Vantage at Braunfels LLC.
Taxable Property Loans.
Interests in Real Property.
Investment Opportunities
There iscontinues to be a significant unmet demand for affordable multifamily, student, and senior citizen residential housing in the United States. The United States Department of Housing and Urban Development (“HUD”)HUD reports that there are approximately 5.5 million American households in need ofis a high demand for quality affordable housing. The types of tax-exempt mortgage revenue bonds in which we invest offer developers of affordable housing a low-cost source of construction and permanent debt financing for these types of properties. Investors purchase these bonds because the interest income paid on these bonds is expected to be exempt from federal income taxation.
The National Council of State Housing Agencies Fact Sheet and HUD have captured some key scale metrics and opportunities of this market:
for affordable housing through mortgage revenue bonds, tax credits, and grant funding to inflation.
In addition to tax-exemptmortgage revenue bonds, the federal government promotes affordable housing through the use of LIHTCs for affordable multifamily rental housing. The syndication and sale of LIHTCs along with tax-exemptmortgage revenue bond financing is attractive to developers of affordable housing because it helps them raise equity and debt financing for their projects. Under this program, developers that receive an allocation of private activity bonds will also receive an allocation of federal LIHTCs as a method to encourage the development of affordable multifamily housing. The Partnership doesWe do not invest in LIHTCs, but isare attracted to tax-exempt mortgage revenue bonds that are issued in association with federal LIHTC syndications because in order to be eligible for federal LIHTCs a property must either be newly constructed or substantially rehabilitated and therefore, may be less likely to become functionally obsolete in the near term than an older property. There are various requirements in order to be eligible for federal LIHTCs, including rent and tenant income restrictions. In general, the property owner must elect to set aside either 40% or more of the property’s residential units for occupancy by individuals whose income is 60% or less of the area median gross income or 20% or more of the property’s residential units for occupancy by individuals whose income is 50% or less of the area median gross income.income, in each case subject to adjustment for household size. These units remain subject to these set aside requirements for a minimum of 30 years.
Economic Conditions
2015 as compared to 87% during 2014.
The Partnership was formed on April 2, 1998 under the Delaware Revised Uniform Limited Partnership Act.Act (the “Delaware LP Act”). The operations of the Partnership are conducted pursuant to the terms and conditions of its Partnership Agreement. See “TERMS OF THE PARTNERSHIP AGREEMENT.“The Partnership Agreement”
Our general partner is America First Capital Associates Limited Partnership 2 (the “General Partner”), whichwhose general partner is a subsidiary of The Burlington Capital Group L.L.C. (“Burlington”).Capital. Since 1984, Burlington (which was known as America First Companies L.L.C. until 2005)Capital has specialized in the management of investment funds, many of which were formed to acquire real estate investments such as tax-exempt mortgage revenue bonds, mortgagemortgage-backed securities, and multifamily real estate properties. Our sole limited partner is America First Fiduciary Corporation Number Five, a Nebraska corporation. Our shares, which are referred to as “beneficial unit certificates” or “BUCs” in the Partnership Agreement, represent assignments by the sole limited partner of its rightsproperties, including multifamily, student, and obligations as a limited partner.
We are a partnership for federal income tax purposes. This means that we do not pay federal income taxes on our income. Instead, all of our profits and losses are allocated to our partners, including the holders of shares,Units, under the terms of our Partnership Agreement. See “U.S. Federal Income Tax Considerations” beginning on page 19. In addition, a majority of our income consists of tax‑exemptwhat we believe and expect to be tax-exempt interest income. See “ U.S. FEDERAL INCOME TAX CONSIDERATIONS.”
Our principal executive office isoffices are located at 1004 Farnam Street, Suite 400, Omaha, Nebraska 68102, and our telephone number is (402) 444-1630. We maintain a website at
into, and does not form a part of, this prospectus, any accompanying prospectus supplement or any other report or document we file with or furnish to the SEC.
Our initial limited partner, which made the General Partner, which is managed by its general partner, Burlington. The persons acting as the Board of Managers and executive officers of Burlington act as the directors and executive officers of the Partnership. Certain services are provided to the Partnership by other employees of Burlington and the Partnership reimburses Burlington for its allocated share of these salaries and benefits. The Partnership is not charged, and does not reimburse Burlington, for the services performed by executive officers of Burlington. As a result, the Partnership does not pay compensation of any nature to the persons who effectively act as its executive officers. Accordingly, the Partnership does not provide tabular disclosures regarding executive compensation, compensation discussion and analysis, a compensation committee report or information regarding compensation committee interlocks in the reports it files with the SEC.
For additional information about our business, properties, and financial condition, please refer to the General Partner with respect to any foreclosed mortgage bonds.
An investment in our securities involves risks. Additionally, limited partner interests are inherently different from the identification and evaluationcapital stock of additional investments that we acquire. Any mortgage placement fees from a tax-exempt mortgage revenue bond investment will be paid by the ownerscorporation, although many of the properties financedbusiness risks to which we are subject are similar to those that would be faced by the acquired mortgage revenue bonds out of bond proceeds. The amount of mortgage placement fees, if any, will be subject to negotiation between the General Partner or its affiliates and such property owners.
.”
Unless we inform you otherwise in a supplement to this prospectus, we intend to use the net proceeds of this offering primarily to acquire additional tax-exempt mortgage revenue bonds secured by multifamily apartment properties and other investments meeting our investment criteria. Any remaining net proceeds will be used for general business purposes, including reduction in our indebtedness.
General Partner and manages our investments and performs administrative services for us and earns certain fees that are either paid by the properties financed by our tax-exempt mortgage revenue bonds or by us. Another subsidiary of Burlington provides on-site management for some of the multifamily apartment properties that underlie our tax-exempt mortgage revenue bonds and each of our MF Properties and earns fees from the property owners based on the gross revenues of these properties. The owners of the limited-purpose corporations which own three of the apartment properties financed with tax-exempt mortgage revenue bonds and taxable loans held by the Partnership are employees of Burlington who are not involved in the operation or management of the Partnership and who are not executive officers or managers of Burlington. Because of these relationships, our agreements with Burlington and its subsidiaries are related-party transactions. By their nature, related-party transactions may not be considered to have been negotiated at arm's length. These relationships may also cause a conflict of interest in other situations where we are negotiating with Burlington
The rights and obligations of shareholdersUnitholders and the General Partner are set forth in the Partnership Agreement. The following is a summary of the material provisions of the Partnership Agreement. This summary does not purport to be complete and is subject to, and qualified in its entirety by, the terms of the Partnership Agreement, which is incorporated by reference into the registration statement of which this prospectus.
Organization and Duration
The Partnership was organized in 1998 and has a perpetual existence.
Purpose
The purpose of the Partnership under the Partnership Agreement is to engage directly in, or enter into or form, hold, and dispose of any corporation, partnership, joint venture, limited liability company, or other arrangement to engage indirectly in, any business activity that is approved by the General Partner and that lawfully may be conducted by a limited partnership organized under the Delaware LP Act, and do anything necessary or appropriate to the foregoing. In this regard, the purpose of the Partnership includes, without limitation, the acquisition, holding, selling, and otherwise dealing with mortgage revenue bonds and other instruments backed by multifamily residential properties, and other investments as determined by the General Partner.
Management
Management by General Partner
Under the terms of the Partnership Agreement, the General Partner has full, complete, and exclusive authority to manage and control the business affairs of the Partnership. Such authority specifically includes, but is not limited to, the power to (i) acquire, hold, refund, reissue, remarket, securitize, transfer, foreclose upon, sell or otherwise deal with the investments of the Partnership, (ii) issue additional shares,Units and other Partnership securities, borrow money, and issue evidences of indebtedness, and (iii) apply the proceeds from the sale or the issuance of additional sharesUnits or other Partnership securities to the acquisition of additional revenue bonds (and associated taxable mortgages) and other types of investments meeting the Partnership’s investment criteria.criteria, (iv) issue options, warrants, rights, and other equity instruments relating to Units under employee benefit plans and executive compensation plans maintained or sponsored by the Partnership and its affiliates, (v) issue Partnership securities in one or more classes or series with such designations, preferences, rights, powers, and duties, which may be senior to existing classes and series of Partnership securities, including BUCs, and (vi) engage in spin-offs and other similar transactions, and otherwise transfer or dispose of Partnership assets pursuant to such transactions. The Partnership Agreement provides that the General Partner and its affiliates may and shall have the right to provide goods and services to the Partnership subject to certain conditions. The Partnership Agreement also imposes certain limitations on the authority of the General Partner, including restrictions on the ability of the General Partner to dissolve the Partnership without the consent of a majority in interest of the shareholders.
Other than certain limited voting rights discussed under “VOTING RIGHTS,“Voting Rights,” the shareholdersUnitholders do not have any authority to transact business for, or participate in the management of, the Partnership. The only recourse available to shareholdersUnitholders in the event that the General Partner takes actions with respect to the business of the Partnership with which shareholdersUnitholders do not agree is to vote to remove the General Partner and admit a substitute general partner. See “Removal“Removal or Withdrawal of the General Partner”Partner” below.
Change of Management Provisions
The Partnership Agreement contains provisions that are intended to discourage any person or group from attempting to remove the General Partner or otherwise changing the Partnership’s management, and Distributionsthereby achieve
Net Interest Incomea takeover of the Partnership, without first negotiating such acquisition with the Board of Managers of Burlington Capital. In this regard, the Partnership Agreement provides that if any person or group (other than the General Partner and its affiliates) acquires beneficial ownership of 20% or more of any class of Partnership securities (including Units), that person or group loses voting rights with respect to all of his, her, or its securities and such securities will not be considered “outstanding” for voting or notice purposes, except as required by law. This loss of voting rights will not apply to any person or group that acquires the securities from the General Partner or its affiliates and any transferees of that person or group approved by the General Partner, or to any person or group who acquires the securities with the prior approval of the Board of Managers of Burlington Capital.
In addition, the Partnership Agreement provides that, under circumstances where the General Partner withdraws without violating the Partnership Agreement or is removed by the Unitholders without cause, the departing General Partner will have the option to require the successor general partner to purchase the general partner interest of the departing General Partner and its general partner distribution rights for their fair market value. See “– Withdrawal or Removal of the General Partner” below.
Issuance of Partnership Securities
As of the date of this prospectus, other than the interest of the General Partner in the Partnership, our only outstanding Partnership securities are the BUCs and the Series A Preferred Units representing limited partnership interests in the Partnership (“Series A Preferred Units”). The Partnership Agreement provides that the General Partner may cause the Partnership to issue additional Units from time to time on such terms and conditions as it shall determine. In addition, subject to certain approval rights of the holders of Series A Preferred Units for issuances adversely affecting the Series A Preferred Units, the Partnership Agreement authorizes the General Partner to issue additional limited partnership interests and other Partnership securities in one or more classes or series with such designations, preferences, rights, powers, and duties, which may be senior to existing classes and series of Partnership securities, including BUCs, as determined by the General Partner without the approval of Unitholders.
It is possible that we will fund acquisitions of our investments and other business operations through the issuance of additional Units, preferred units, or other equity securities. The holders of Units do not have a preemptive right to acquire additional Units or other Partnership securities. All limited partnership interests issued pursuant to and in accordance with the Partnership Agreement are considered fully paid and non-assessable limited partnership interests in the Partnership.
In connection with the initial closing of our offering of Series A Preferred Units on March 30, 2016, we executed the First Amendment to First Amended and Restated Agreement of Limited Partnership of America First Multifamily Investors, L.P. for the purpose of defining the preferences, rights, powers, and duties of holders of Series A Preferred Units. Holders of the Series A Preferred Units are entitled to receive, when, as, and if declared by the General Partner out of funds legally available for the payment of distributions, non-cumulative cash distributions at the rate of 3.00% per annum of the $10.00 per unit purchase price of the Series A Preferred Units, payable quarterly. In the event of any liquidation, dissolution, or winding up of the Partnership, the holders of the Series A Preferred Units are entitled to a liquidation preference in connection with their investments in an amount equal to $10.00 per Series A Preferred Unit, plus an amount equal to all distributions declared and unpaid thereon to the date of final distribution.
With respect to anticipated quarterly distributions and rights upon liquidation, dissolution, or the winding-up of the Partnership’s affairs, the Series A Preferred Units rank senior to the BUCs and to any other class or series of Partnership interests or securities expressly designated as ranking junior to the Series A Preferred Units, and junior to any other class or series of Partnership interests or securities expressly designated as ranking senior to the Series A Preferred Units. The Series A Preferred Units have no stated maturity, are not subject to any sinking fund requirements, and will remain outstanding indefinitely unless repurchased or redeemed by the Partnership. Upon the sixth anniversary of the closing of the sale of Series A Preferred Units to a holder thereof, and upon each anniversary thereafter, each holder of Series A Preferred Units will have the right to redeem, in whole or in part, the Series A Preferred Units held by such holder at a per unit redemption price equal to $10.00 per unit plus an amount equal to all declared and unpaid distributions. Holders of Series A Preferred Units will have no voting rights except for limited voting rights relating to issuances of Partnership securities adversely affecting the Series A Preferred Units.
General
The Partnership Agreement provides that all Net Interest Income generated by the Partnership that is not contingent interest will be distributed 99% to shareholdersthe limited partners and Unitholders as a class and 1% to the General Partner. During the years ended December 31, 20122015 and 2011,2014, the General Partner received total distributions of Net Interest Income of approximately $180,000$269,000 and $155,000,$265,000, respectively. In addition, the Partnership Agreement provides that the General Partner is entitled to 25% of Net Interest Income representing contingent interest up to a maximum amount equal to 0.9% per annum of the principal amount of all mortgage bonds held by the Partnership, as the case may be. During the yearyears ended December 31, 2011,2015 and 2014, the General Partner received total distributions of Net Interest Income representing contingent interest of approximately $310,000. The General Partner did not receive any distributions of Net Interest Income representing contingent interest in 2012.
Interest Income of the Partnership includes all cash receipts, except for (i) capital contributions, (ii) Residual Proceeds (defined below), or (iii) the proceeds of any loan or the refinancing of any loan. “Net Interest Income” of the Partnership means all Interest Income plus any amount released from the PartnershipPartnership’s reserves for distribution, less expenses and debt service payments and any amount deposited in reserve or used or held for the acquisition of additional investments.
The Partnership Agreement provides that Net Residual Proceeds (whether representing a return of principal or contingent interest) will be distributed 100% to the shareholders,limited partners and Unitholders as a class, except that 25% of Net Residual Proceeds representing contingent interest will be distributed to the General Partner until it receives a maximum amount per annum (when combined with all distributions to it of Net Interest Income representing contingent interest during the year) equal to 0.9% of the principal amount of the Partnership’s mortgage bonds. Under the terms of the Partnership Agreement, “Residual Proceeds”“Residual Proceeds” means all amounts received by the Partnership upon the sale of any asset or from the repayment of principal of any bond. “Net“Net Residual Proceeds”Proceeds” means, with respect to any distribution period, all Residual Proceeds received by the Partnership during such distribution period, plus
With respect to the cash available for distribution to the limited partners, and subject to the preferential rights of the holders of any class or series of our Partnership expires on December 31, 2050 unless terminated earliersecurities ranking senior to the Series A Preferred Units with respect to distribution rights, holders of Series A Preferred Units are entitled to receive, when, as, provided inand if declared by the General Partner out of funds legally available for the payment of distributions, non-cumulative cash distributions at the rate of 3.00% per annum of the $10.00 per unit purchase price of the Series A Preferred Units, payable quarterly. The Series A Preferred Units rank senior to our BUCs with respect to the payment of distributions and to any other class or series of Partnership Agreement. interests or securities expressly designated as ranking junior to the Series A Preferred Units, and junior to any other class or series of Partnership interests or securities expressly designated as ranking senior to the Series A Preferred Units.
Distributions Upon Liquidation
Upon the dissolution of the Partnership, the proceeds from the liquidation of its assets will be first applied to the payment of the obligations and liabilities of the Partnership and the establishment of any reservereserves therefor as the General Partner determines to be necessary, and then distributed to the partners (including both the General Partner and the shareholderslimited partners) and Unitholders in proportion to, and to the extent of, their respective capital account balances, and then in the same manner as Net Residual Proceeds. With respect to the liquidation proceeds available for distribution to the limited partners, the holders of the Series A Preferred Units are entitled to a liquidation
preference in an amount equal to $10.00 per Series A Preferred Unit, plus an amount equal to all distributions declared and unpaid thereon to the date of final distribution. The Series A Preferred Units rank senior to our BUCs with respect to distributions upon liquidation, dissolution, or the winding-up of the Partnership’s affairs, and senior to any other class or series of Partnership interests or securities expressly designated as ranking junior to the Series A Preferred Units, and junior to any other class or series of Partnership interests or securities expressly designated as ranking senior to the Series A Preferred Units.
Timing of Cash Distributions
The Partnership currently makes quarterly cash distributions to shareholders.Unitholders. However, the Partnership Agreement allows the General Partner to elect to make cash distributions on a more or less frequent basis provided that distributions are made at least semiannually. Regardless of the distribution period selected by the General Partner, cash distributions to Unitholders must be made within 60 days of the end of each such period.
Allocation of Income and Losses
Income and losses from operations will be allocated 99% to the shareholderslimited partners and Unitholders as a class and 1% to the General Partner. Income arising from a sale of or liquidation of the Partnership’s assets will be first allocated to the General Partner in an amount equal to the Net Residual Proceeds or liquidation proceeds distributed to the General Partner from such transaction, and the balance will be distributedallocated to the shareholders.limited partners and Unitholders as a class. Losses from a sale of a property or from a liquidation of the Partnership will be allocated among the General Partner and the shareholderspartners in the same manner as the Net Residual Proceeds or liquidation proceeds from such transaction are distributed.
Determination of Allocations to Unitholders
Income and losses will be allocated on a monthly basis to the shareholdersUnitholders of record as of the last day of a month. If a shareholderUnitholder is recognized as the record holder of sharesUnits on such date, such shareholderUnitholder will be allocated all income and losses for such month. Cash distributions will be made to the shareholdersUnitholders of record as of the last day of each distribution period. If the Partnership recognizes a transfer prior to the end of a distribution period, the transferee will be deemed to be the holder for the entire distribution period and will receive the entire cash distribution for such period. Accordingly, if the General Partner selects a quarterly or semiannual distribution period, the transferor of sharesUnits during such a distribution period may be recognized as the record holder of the sharesUnits at the end of one or more months during such period and be allocated income or losses for such months but not be recognized as the record holder of the sharesUnits at the end of the period and, therefore, not be entitled to a cash distribution for such period. The General Partner retains the right to change the method by which income and losses of the Partnership will be allocated between buyers and sellers of sharesUnits during a distribution period based on consultation with tax counsel and accountants. However, no change may be made in the method of allocation of income or losses without written notice to the shareholdersUnitholders at least 10 days prior to the proposed effectiveness of such change unless otherwise required by law.
Payments to the General Partner
Fees
In addition to its share of Net Interest Income and Net Residual Proceeds and reimbursement for expenses, the General Partner will beis entitled to an administrative fee in an amount equal to 0.45% per annum of the principal amount of the revenue
administrative fee will be paid directly by the Partnership with respect to any investments for which the administrative fee is not payable by a third party. In addition, the Partnership Agreement provides that the Partnership will pay the administrative fee to the General Partner with respect to any foreclosed mortgage bonds.
Reimbursement of Expenses.
In addition to the allocation of profits, lossescash distributions and cash distributionsfee payments to the General Partner described above, the Partnership will reimburse the General Partner or its affiliates on a monthly basis for the actual out‑of‑pocketout-of-pocket costs of direct telephone and travel expenses incurred in connection with the business of the Partnership, direct out‑of‑pocketout-of-pocket fees, expenses, and charges paid to third parties for rendering legal, auditing, accounting, bookkeeping, computer, printing, and public relations services, expenses of preparing and distributing reports to shareholders,limited partners and Unitholders, an allocable portion of the salaries and fringe benefits of non-officer employees of Burlington Capital, insurance premiums (including premiums for liability insurance that will cover the Partnership, the General Partner, and Burlington)Burlington Capital), the cost of compliance with all state and federal regulatory requirements and NASDAQ listing fees and charges, and other payments to third parties for services rendered to the Partnership. The General Partner will also be reimbursed for any expenses it incurs acting as tax matters partner for the Partnership. The Partnership will not reimburse the General Partner or its affiliates for the travel expenses of the president of Burlington Capital or for any items of general overhead. The Partnership will not reimburse the General Partner or Burlington Capital for any salaries or fringe benefits of any of the executive officers of Burlington. The Partnership’s independent accountants are required to verify that any reimbursements received by the General Partner from the Partnership were for expenses incurred by the General Partner or its affiliates in connection with the conduct of the business and affairs of the Partnership or the acquisition and management of its assets and were otherwise permissible reimbursements under the terms of the Partnership Agreement.Burlington Capital. The annual report to shareholdersUnitholders is required to itemize the amounts reimbursed to the General Partner and its affiliates.
Payments for Goods and Services
The Partnership Agreement provides that the General Partner and its affiliates may provide goods and services to the Partnership. The provision of any goods and services by the General Partner or its affiliates to the Partnership must be part of their ordinary and ongoing business in which it or they have previously engaged, independent of the activities of the Partnership, and such goods and services shall be reasonable for and necessary to the Partnership, shall actually be furnished to the Partnership, and shall be provided at the lower of the actual cost of such goods or services or the competitive price charged for such goods or services for comparable goods and services by independent parties in the same geographic location. All goods and services provided by the General Partner or any affiliates must be rendered pursuant to a written contract containing a clause allowing termination without penalty on 60 days’ notice to the General Partner by the vote of the majority in interest of the shareholders. PaymentUnitholders. Any payment made to the General Partner or any affiliate for goods and services must be fully disclosed to shareholders.all limited partners and Unitholders. The General Partner does not currently provide goods and services to the Partnership other than its services as General Partner. If the Partnership acquires ownership of any property through foreclosure of a revenue bond, an affiliate of the General Partner or an affiliate may provide property management services for such property and, in such case, the Partnership will pay such party its fees for such services. Under the Partnership Agreement, such property management fees may not exceed the lesser of (i) the fees charged by unaffiliated property managers in the same geographic area, or (ii) 5% of the gross revenues of the managed property.
Liability of Partners and Shareholders
Under the Delaware Revised Uniform Limited PartnershipLP Act (the “Delaware LP Act”) and the terms of the Partnership Agreement, the General Partner will be liable to third parties for all general obligations of the Partnership to the extent not paid by the Partnership. However, the Partnership Agreement provides that the General Partner has no liability to the Partnership for any act or omission reasonably believed to be within the scope of authority conferred by the Partnership Agreement and in the best interest of the Partnership. The Partnership providedAgreement also provides that, except as otherwise expressly set forth in the course of conduct giving risePartnership Agreement, the General Partner does not owe any fiduciary duties to the threatened, pending or completed claim, action or suit did not constitute fraud, bad faith, negligence, misconduct or a breach of its fiduciary obligations to the shareholders.limited partners and Unitholders. Therefore, shareholdersUnitholders may have a more limited right of action against the General Partner than they would have absent those limitations in the Partnership Agreement. The Partnership Agreement also provides for indemnification of the General Partner and its affiliates by the Partnership for certain liabilities that the General Partner and its affiliates may incur under the Securities Act of 1933, as amended, and in dealingsconnection with the Partnership and third parties on behalfbusiness of the Partnership.Partnership; provided that no indemnification will be available to the General Partner and/or its affiliates if there has been a final judgment entered by a court determining that the General Partner’s and/or affiliate’s conduct for which indemnification is requested constitutes fraud, bad faith, gross negligence, or willful misconduct. To the extent that the provisions of
the Partnership Agreement include indemnification for liabilities arising under the Securities Act of 1933, as amended, such provisions are, in the opinion of the SEC, against public policy and, therefore, unenforceable.
No shareholderUnitholder will be personally liable for the debts, liabilities, contracts, or any other obligations of the Partnership unless, in addition to the exercise of his or her rights and powers as a shareholder,Unitholder, he or she takes part in the control of the business of the Partnership. It should be noted, however, that the Delaware LP Act prohibits a limited partnership from making a distribution that causes the liabilities of the limited partnership to exceed the fair value of its assets. Any limited partner who receives a distribution knowing that the distribution was made in violation of this provision of the Delaware LP Act is liable to the limited partnership for the amount of the distribution. This provision of the Delaware LP Act probablylikely applies to shareholders as well as to the sole limited partner of the Partnership.Unitholders. In any event, the Partnership Agreement provides that to the extent our soleinitial limited partner is required to return any distributions or repay any amount by law or pursuant to the Partnership Agreement, each shareholderUnitholder who has received any portion of such distributions is required to repay his or her proportionate share of such distribution to our soleinitial limited partner immediately upon notice by the soleinitial limited partner to such shareholder.Unitholder. Furthermore, the Partnership Agreement allows the General Partner to withhold future distributions to shareholdersUnitholders until the amount so withheld equals the amount required to be returned by the soleinitial limited partner. Because sharesUnits are transferable, it is possible that distributions may be withheld from a shareholderUnitholder who did not receive the distribution required to be returned.
Voting Rights
The Partnership Agreement provides that the soleinitial limited partner will vote its limited partnership interests as directed by the shareholders.Unitholders. Accordingly, except as described below regarding a person or group owning 20% or more of any class of Partnership securities then outstanding, the shareholders,Unitholders, by vote of a majority in interest thereof,of the outstanding Units, may:
(i) | amend the Partnership Agreement (provided that the concurrence of the General Partner is required for any amendment that modifies the compensation or distributions to which the General Partner is entitled or that affects the duties of the General Partner); |
(ii) | approve or disapprove the |
(iii) | dissolve the Partnership; |
(iv) | elect a successor general |
(v) | terminate an agreement under which the General Partner provides goods and services to the Partnership. |
In addition, subject to the provisions of the Partnership Agreement regarding removal of the General Partner (described below), the Unitholders holding at least 662/3% of the outstanding Units may remove the General Partner.
Each limited partner and Unitholder is entitled to cast one vote for each unit of limited partnership interest he or she owns. However, 24if any person or group (other than the General Partner and its affiliates) acquires beneficial ownership of 20% or more of any class of Partnership securities (including Units), that person or group loses voting rights with respect to all of his, her, or its securities and such securities will not be considered “outstanding” for voting or notice purposes, except as required by law. This loss of voting rights will not apply to any person or group that acquires the Partnership securities from the General Partner or its affiliates and any transferees of that person or group approved by the General Partner, or to any person or group who acquires the securities with the prior approval of the Board of Managers of Burlington Capital.
solicit consents following receipt of a written request therefor signed by 10% or more in interest of the shareholders. outstanding Unitholders. The Partnership does not intend to hold annual or other periodic meetings of shareholders. Although the Partnership Agreement permits the consent of the shareholders to be given after the act is done with respect to which the consent is solicited, the General Partner does not intend to act without the prior consent of the shareholders, in such cases where consent of the shareholders is required, except in extraordinary circumstances where inaction may have a material adverse effect on the interest of the shareholders.
Reports
Within 120 days after the end of the fiscal year, the General Partner will distribute a report to shareholdersUnitholders that shall include (i) financial statements of the Partnership for such year that have been audited by the Partnership’s independent public accountant, (ii) a report of the activities of the Partnership during such year, and (iii) a statement (which need not be audited) showing distributions of Net Interest Income and Net Residual Proceeds. The annual report will also include a detailed statement of the amounts of fees and expense reimbursements paid to the General Partner and its affiliates by the Partnership during the fiscal year.
Within 60 days after the end of the first three quarters of each fiscal year, the General Partner will distribute a report that shall include (i) unaudited financial statements of the Partnership for such quarter, (ii) a report of the activities of the Partnership during such quarter, and (iii) a statement showing distributions of Net Interest Income and Net Residual Proceeds during such quarter.
The Partnership will also provide shareholdersUnitholders with a report on Form K‑1K-1 or other information required for federal and state income tax purposes within 75 days of the end of each year.
Withdrawal or WithdrawalRemoval of the General Partner
The General Partner may not withdraw voluntarily from the Partnership or sell, transfer, or assign all or any portion of its interest in the Partnership unless a substitute general partner has been admitted in accordance with the terms of the Partnership Agreement. With the consent of a majority in interest of the shareholders,Unitholders, the General Partner may at any time designate one or more persons as additional general partners, provided that the interests of the shareholderslimited partners and Unitholders in the Partnership are not reduced thereby. The designation must meet the conditions set out in the Partnership Agreement and comply with the provisions of the Delaware LP Act with respect to admission of an additional general partner. In addition to the requirement that the admission of a person as successor or additional general partner have the consent of the majority in interest of the shareholders,Unitholders, the Partnership Agreement requires, among other things, that (i) such person agree to and execute the Partnership Agreement, and (ii) counsel for the Partnership or shareholdersUnitholders render an opinion that such person’s admission would not result in the loss of limited liability of any limited partner or Unitholder or cause the Partnership or any of its affiliates to be taxed as a corporation or other entity under U.S. federal tax law.
With respect to the removal of the General Partner, the Partnership Agreement provides that the General Partner may not be removed unless that removal is approved by a vote of the holders of not less than 662/3% of the outstanding Units, including Units held by the General Partner and its affiliates, voting together as a single class, and the Partnership receives an opinion of counsel regarding limited liability and tax matters. Any removal of the General Partner also will be subject to the approval of a successor general partner by the vote of a majority in accordance withinterest of the Delaware LP Act.outstanding Units voting as a single class.
In addition, the Partnership Agreement provides that, under circumstances where the General Partner withdraws without violating the Partnership Agreement or is removed by the Unitholders without cause, the departing General Partner will have the option to require the successor general partner to purchase the general partner interest of the departing General Partner and its general partner distribution rights for their fair market value. This fair market value will be determined by agreement between the departing General Partner and the successor general partner. If no such agreement is reached, an independent investment banking firm or other independent expert selected by the departing General Partner and successor general partner will determine the fair market value. If the departing General Partner and successor general partner cannot agree upon an expert, then an expert chosen by agreement of the experts selected by each of them will determine the fair market value. If the option described above is not exercised, the departing General Partner’s interest and general partner distribution rights will automatically convert into Units equal to the fair market value of those interests as determined by an investment banking firm or other independent expert selected in the manner described above.
The Partnership Agreement also provides that if the General Partner is removed as the Partnership’s general partner under circumstances where cause does not exist and the Units held by the General Partner and its affiliates are not voted in favor of that removal, the General Partner will have the right to convert its general partner interest and its general partner distribution rights under the Partnership Agreement into Units or receive cash in exchange for those interests from the Partnership.
Effect of Removal, Bankruptcy, Dissolution, or Withdrawal of the General Partner
In the event of a removal, bankruptcy, dissolution, or withdrawal of the General Partner, it will cease to be the General Partner but will remain liable for obligations arising prior to the time it ceases to act in that role. The former General Partner’s interest in the Partnership will be converted into a limited partner interest having the same rights to share in the allocations of income and losses of the Partnership and distributions of Net Interest Income, Net Residual Proceeds and cash distributions upon liquidation of the Partnership as it did as General Partner. Any successor general partner shall have the option, but not the obligation, to acquire all or a portion of the interest of the removed General Partner at its then fair market value. The Partnership Agreement bases the fair market value of the General Partner’s interest on the present value of its future administrative fees and distributions of Net Interest Income plus any amount that would be paid to the removed General Partner upon an immediate liquidation of the Partnership. Any disputes over valuation in connection with an option exercised by the successor general partner would be settled by the successor general partner and removed General Partner through arbitration.
Amendments
Amendments to the Partnership Agreement may be proposed by the General Partner or by the limited partners holding 10% or more of the outstanding limited partnership interests. In order to adopt a proposed amendment, other than the amendments discussed below which may be approved solely by the General Partner, the General Partner must seek approval of the holders of the required number of Units to approve the amendment, whether by written consent or pursuant to a meeting of the Unitholders to consider and vote upon the proposed amendment.
In addition to amendments to the Partnership Agreement adopted by a majority in interest of the shareholders,Unitholders, the Partnership Agreement may be amended by the General Partner, without the consent of the shareholders,limited partners or Unitholders, in certain limited respects if such amendments are not materially adverse to the interest of the shareholders. In addition,Unitholders, to reflect the following:
to change the name of the Partnership, the location of its principal place of business, its registered agent, or its registered office;
to add to the representations, duties, or obligations of the General Partner is authorizedor surrender any right or power granted to amendthe General Partner in the Partnership Agreement;
to change the fiscal year or taxable year of the Partnership and any other changes the General Partner determines to be necessary or appropriate as a result of a change in the fiscal year or taxable year;
to cure any ambiguity or correct or supplement any provision of the Partnership Agreement to admit additional, substitute or successor partners intowhich may be inconsistent with the intent of the Partnership Agreement, if such amendment is not materially adverse to the interests of the limited partners and Unitholders in the sole judgment of the General Partner;
to amend any provision the General Partner determines to be necessary or appropriate to satisfy any judicial authority or any order, directive, or requirement contained in any federal or state statute, or to facilitate the trading of Units or comply with the rules of any national securities exchange on which the Units are traded;
to reflect the withdrawal, removal, or admission is effectedof partners;
to provide for any amendment necessary, in accordancethe opinion of counsel to the Partnership, to prevent the Partnership, the General Partner, or their managers, directors, officers, trustees, or agents from being subject to the Investment Company Act of 1940, the Investment Advisers Act of 1940, or the “plan asset” regulations under ERISA;
to effectuate any amendment to the Partnership Agreement or the Partnership’s certificate of limited partnership that the General Partner determines to be necessary or appropriate in connection with the authorization of the issuance of any class or series of Partnership securities; and
any other amendments substantially similar to any of the foregoing.
However, notwithstanding the foregoing, any amendment to the Partnership Agreement that (i) would have a material adverse effect on the existing terms of the Series A Preferred Units, or (ii) creates Partnership securities senior to the Series A Preferred Units, must be approved by the affirmative vote or consent of the holders of at least a majority of the outstanding Series A Preferred Units, voting as a single class.
Dissolution and Liquidation
The Partnership will continue in existence until dissolved under the terms of the Partnership Agreement.
(i) | the passage of 90 days following the bankruptcy, dissolution, withdrawal, or removal of a general partner who is at that time the sole general partner, unless all of the remaining partners entitled to vote (it being understood that for purposes of this provision the |
(ii) |
the election by a majority in interest of |
(iii) | any other event causing the dissolution of the Partnership under the laws of the State of Delaware. |
Upon dissolution of the Partnership, its assets will be liquidated and after the payment of its obligations and the setting up of any reserves for contingencies that the General Partner considers necessary, any proceeds from the liquidation will be distributed as set forth under "-ALLOCATIONS AND DISTRIBUTIONS-DISTRIBUTIONS UPON LIQUIDATION"“– Distributions Upon Liquidation” above.
Designation of Tax Matters Partner
The General Partner has been designated as the Partnership’s “tax matters partner” for purposes of federal income tax audits pursuant to Section 6231 of the Internal Revenue Code and the regulations thereunder. Each shareholderUnitholder agrees to execute any documents that may be necessary or appropriate to maintain such designation.
Tax Elections
Under the Partnership Agreement, the General Partner has the exclusive authority to make or revoke any tax elections on behalf of the Partnership.
The books and records of the Partnership shall be maintained at the office of the Partnership located at Suite 400, 1004 Farnam Street, Omaha, Nebraska 68102, and shall be available there during ordinary business hours for examination and copying by any shareholderUnitholder or his or her duly authorized representative. The records of the Partnership will include, among other records, a list of the names and addresses of all shareholders,Unitholders, and shareholdersUnitholders will have the right to secure, upon written request to the General Partner and payment of reasonable expenses in connection therewith, a list of the names and addresses of, and the number of sharesUnits held by, all shareholders.
Accounting Matters
The fiscal year of the Partnership will beis the calendar year. The books and records of the Partnership shall be maintained on an accrual basis in accordance with generally accepted accounting principles.
Other Activities
The Partnership Agreement allows the General Partner and its affiliates to engage generally in other business ventures and provides that shareholderslimited partners and Unitholders will have no rights with respect thereto by virtue of the Partnership Agreement. In addition, the Partnership Agreement provides that an affiliate of the General Partner may acquire and hold debt securities or other interests secured by a property that also secures a mortgage bond held by the Partnership, provided that such mortgage bond is not junior or subordinate to the interest held by such affiliate.
Derivative Actions
The Partnership Agreement provides that a shareholderUnitholder may bring a derivative action on behalf of the Partnership to recover a judgment to the same extent as a limited partner has such rights under the Delaware LP Act. The Delaware LP Act provides for the right to bring a derivative action, although it authorizes only a partner of a partnership to bring such an action. There is no specific judicial or statutory authority governing the question of whether an assignee of a partner (such as a shareholder)Unitholder) has the right to bring a derivative action where a specific provision exists in the Partnership Agreement granting such rights. Furthermore, there is no express statutory authority for a limited partner’s class action in Delaware, and whether a class action may be brought by shareholdersUnitholders to recover damages for breach of the General Partner’s fiduciary duties in Delaware state courts is unclear
unclear.
Beneficial Unit Certificates
Our sharesUnits are beneficial shareunit certificates that represent assignments by the soleinitial limited partner of its entire limited partner interest in the Partnership. Although shareholdersUnitholders will not be limited partners of the Partnership and have no right to be admitted as limited partners, they will be bound by the terms of the Partnership Agreement and will be entitled to the same economic benefits, including the same share of income, gains, losses, deductions, credits, and cash distributions, as if they were limited partners of the Partnership.
For a description of the shareholders (voting through the sole limited partner), without the concurrencerights and privileges of the General Partner, may, among other things, (i) amend the Partnership Agreement (with certain restrictions), (ii) approve or disapprove the saleholders of all or substantially all ofour Units and the Partnership’s assets in a single transaction (other than a transfer necessarylimited partners, including, among others things, rights to for a securitizationdistributions, voting rights, and rights to receive reports, see “The Partnership Agreement” above.
Transfers of the Partnership’s tax-exempt bonds or a sale of assets following dissolution of the Partnership), (iii) dissolve the Partnership or (iv) remove the General Partner and elect a replacement therefor. Units
The General Partner may not dissolve the Partnership without the consent of a majority in interest of the shareholders.
A purchaser of sharesUnits will be recognized as a shareholderUnitholder for all purposes on the books and records of the Partnership on the day on which the General Partner (or other transfer agent appointed by the General Partner)
receives satisfactory evidence of the transfer of shares.Units. All shareholderUnitholder rights, including voting rights, rights to receive distributions, and rights to receive reports, and all allocations in respect of shareholders,Unitholders, including allocations of income and expenses, will vest in, and be allocable to, shareholdersUnitholders as of the close of business on such day. American Stock Transfer & Trust Company, LLC, of New York, New York has been appointed by the General Partner to act as the registrar and transfer agent for the shares.
A transfer or assignment of 50% or more of the outstanding sharesUnits within a 12‑month12-month period may terminate the Partnership for federal income tax purposes, which may result in adverse tax consequences to shareholders.Unitholders. In order to protect against such a termination, the Partnership Agreement permits the General Partner to suspend or defer any transfers or assignments of shareslimited partnership interests at any time after it determines that 45% or more of all sharespartnership interests and Units may have been transferred (as defined by the federal income tax laws) within a 12‑month12-month period and that the resulting termination of the Partnership for tax purposes would adversely affect the economic interests of the shareholders.Unitholders. Any deferred transfers will be effected (in chronological order to the extent practicable) on the first day of the next succeeding period in which transfers can be effected without causing a termination of the Partnership for tax purposes or any adverse effects from such termination, as the case may be.
In addition, the Partnership Agreement grants the General Partner the authority to take such action as it deems necessary or appropriate, including action with respect to the manner in which sharesUnits are being or may be transferred or traded, in order to preserve the status of the Partnership as a partnership for federal income tax purposes or to ensure that shareholderslimited partners (including Unitholders) will be treated as limited partners for federal income tax purposes.
The following summarizesdescribes U.S. federal income tax considerations with respect to the purchase, ownership and disposition of the shares.Units. This summarydescription is based on existing U.S. federal income tax law, consisting of the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury Regulations thereunder, and judicial and administrative interpretations thereof, all of which is subject to change, possibly with retroactive effect. This discussiondescription does not address all aspects of U.S. federal income taxation that may be relevant to you in light of your personal circumstances or to certain types of investors subject to special treatment under the U.S. federal income tax laws (including financial institutions, insurance companies, broker‑dealersbroker-dealers and, except to the extent discussed below, tax‑exempttax-exempt entities, partnerships or other pass‑throughpass-through entities and non-U.S. shareholders)Unitholders) and it does not discuss any aspects of state, local or foreign tax law. This discussion assumes that you will hold your sharesUnits as a “capital asset” (generally, property held for investment) under the Internal Revenue Code.
All statements of law and legal conclusions, but not any statements of fact, contained in this section, except as described below or otherwise noted, are the opinion of Baird Holm LLP and are based on the accuracy of representations made by the Company to Baird Holm LLP for this purpose. Baird Holm LLP is unable to opine that interest on any mortgage revenue bond held by the Company is currently excludable from gross income of a bondholder for federal income tax purposes because the facts necessary to provide such an opinion are unknown and not reasonably available to the Company or counsel, such facts cannot be obtained by the Company or counsel without unreasonable effort or expense, and because such facts rest peculiarly within the knowledge of other persons not affiliated with the Company. Specifically, such opinion would require detailed information and calculations from the respective issuer, borrower, bond trustee, and guarantors of each mortgage revenue bond regarding eligibility under and compliance with the applicable provisions of the Internal Revenue Code of 1954 and 1986, as applicable, and all related regulations, including without limitations, information and computations relating to the investment of bond proceeds, use of bond proceeds, occupancy of bond-financed properties and rebate payments to the United States. Both the Company and its counsel have determined it is not possible to obtain this information and computations for all mortgage revenue bonds.
No ruling on the federal, state or local tax considerations relevant to the purchase, ownership and disposition of the Partnership’s shares,Units, or the statements or conclusions in this summary,description, has been or will be requested from the IRS or from any other tax authority, and a taxing authority, including the IRS, may not agree with the statements and conclusions expressed herein. The Partnership will receive anIn the opinion from Barnes & Thornburgof Baird Holm LLP, counsel to the Partnership, to the effect that, for U.S. federal income tax purposes, the Partnership shouldwill be treated as a partnership and the holders of shares shouldUnits will be subject to tax as partners of the Partnership. However, no assurance can be given that any opinion of counsel would
be accepted by the IRS or, if challenged by the IRS, sustained in court. We urge you to consult your own tax advisors about the specific tax consequences to you of purchasing, holding and disposing of our shares,Units, including the application and effect of federal, state, local and foreign income and other tax laws.
Income tax considerations relatingTax Considerations Relating to the Partnership and its shareholders.
Partnership Status.
Under theBecause the Partnership will be treated as a partnership for income tax purposes, it will not be liable for any income tax. Rather, all items of the Partnership’s income, gain, loss, deduction or tax credit will be allocated to its partners (including the shareholders)Unitholders), who will be subject to taxation on their distributive share thereof. Taxable income allocated by the Partnership to shareholdersUnitholders with respect to a taxable year may exceed the amount of cash distributed by the Partnership to shareholdersUnitholders for such year.
The Partnership is not intended to act as a “tax shelter” and will not register as such with the IRS.
Treatment of the Partnership as a Publicly Traded Partnership.
The listing of our commonIf for any reason less than 90% of our gross income constitutes qualifying income, items of income and deduction would not pass through to our shareholdersUnitholders and our shareholdersUnitholders would be treated for federal income tax purposes as shareholdersUnitholders in a corporation. We would be required to pay income tax at regular corporate rates on any portion of our net income that did not constitute tax‑exempttax-exempt income. In addition, a portion of our tax‑exempttax-exempt income may be included in determining our alternative minimum tax liability. To the extent we are required to pay income taxes, it will reduce the cash that we would otherwise have available for distributions. In addition, all distributions made by us to our shareholdersUnitholders would constitute dividend income taxable to such shareholdersUnitholders to the extent of our earnings and profits, which would include tax‑exempttax-exempt income, as well as any taxable income we might have. In that case, shareholdersUnitholders could not treat any of these distributions as tax-exempt income and the Partnership could not deduct amounts paid as dividends from its gross income. These consequences would have a material adverse effect on us, our Unitholders and the value of the Units.
Taxation of the Partnership and ShareholdersUnitholders. A partnership is not subject to federal income tax. AssumingBecause the Partnership iswill be classified as a partnership for tax purposes, and assuming that at least 90% of the Partnership’s gross income will constitute qualifying income such that it will not abe publicly traded partnership taxable as a corporation, the Partnership will not be subject to federal income tax and each shareholderUnitholder will be required to report on its income tax return its distributive share of the Partnership’s income, gain, loss, deduction and items of tax preference and will be subject to tax on its distributive share of the Partnership’s taxable income, regardless of whether any portion of that income is, in fact, distributed to such shareholderUnitholder in the shareholder’sUnitholder’s taxable year within which or with which the Partnership’s taxable year ends. Thus, shareholdersUnitholders may be required to accrue income, without the current receipt of cash, if the Partnership does not make cash distributions while generating taxable income. Consequently, although it is not anticipated, a shareholder’sUnitholder’s tax liability with respect to its share of the Partnership’s taxable income may exceed the cash actually distributed in a given taxable year. The Partnership currently uses the calendar year as its taxable year.
The Partnership will file a federal tax return on Form 1065 and will provide information as to each shareholder’sUnitholder’s distributive share of the Partnership’s income, gain, loss, deduction and items of tax preference on a Schedule K‑1K-1 supplied to such shareholderUnitholder after the close of the fiscal year. In preparing such information, the Partnership will utilize various accounting and reporting conventions, some of which are discussed herein, to determine each shareholder’sUnitholder’s allocable share of income, gain, loss and deduction. There is no assurance that the use of such conventions will produce a result that conforms to the requirements of the Internal Revenue Code, temporary and proposed treasury regulations or IRS administrative pronouncements and there is no assurance that the IRS will not successfully contend that such conventions are impermissible. Any such contentions could result in substantial expenses to the Partnership and its shareholdersUnitholders as a result of contesting such contentions, as well as an increase in tax liability to shareholdersUnitholders as a result of adjustments to their allocable share of our income, gain, loss and deduction. See “—TAX RETURNS, AUDITS, INTEREST AND PENALTIES.“– Tax Returns, Audits, Interest and Penalties.”
Capital Gain Upon Sale of Assets
. The Partnership may, from time to time, sell, dispose of or otherwise be treated as disposing of, certain of its assets. Such sale or disposition may result in taxable capital gain.Unitholder’s Basis in Shares
Your initial basis in your sharesUnits will be the purchase price for the shares,Units, increased by your share of items of our income (including tax‑exemptany tax-exempt interest) and gain, and reduced, but not below zero, by (a) your share of items of Company loss and deduction (including any nondeductible expenses), and (b) any cash distributions you receive from the Partnership.
Treatment of Cash Distributions to ShareholdersUnitholders from the Partnership
Limitations on Deductibility of Losses. In the event you are allocated losses, you generally will be entitled to deduct your distributive share of any losses of the Partnership to the extent of your tax basis of your sharesUnits at the end of the year in which such losses occur. However, shareholdersUnitholders who are individuals, trusts, estates, personal service companies and certain closely held C corporations may be subject to additional limitations on deducting losses of the Partnership.
Limitation on the Deductibility of Interest Expense
. The Internal Revenue Code disallows any deduction for interest paid by any taxpayer on indebtedness incurred or continued for the purpose of purchasing or carrying anor incurred in connection with the active conduct of a trade or business. The IRS may take the position that a shareholder’sUnitholder’s allocable portion of any interest paid by the Partnership on its borrowings, and any interest paid by a shareholderUnitholder on indebtedness incurred to purchase shares,Units, should be viewed in whole or in part as incurred to enable such shareholderUnitholder to continue carrying such tax‑exempttax-exempt obligations and, therefore, that the deduction of any such interest by such shareholderUnitholder should be disallowed in whole or in part. To the extent the Partnership’s borrowings describe above under “AMERICA FIRST TAX EXEMPT INVESTORS, L.P.—FINANCING ARRANGEMENTS” are deemed to be incurred by it for the purpose of financing its portfolio of tax-exempt mortgage revenue bonds, a shareholder’sUnitholder’s allocable portion of any interest paid by the Partnership on these borrowings will be disallowed.
In the absence of direct evidence linking debt with purchasing or carrying tax‑exempttax-exempt obligations (for example, the tax‑exempttax-exempt obligations secure the debt), there is an exception to the interest disallowance rule if the taxpayer holds only an insubstantial amount of tax‑exempttax-exempt obligations. This exception does not apply to banks, certain other financial institutions, or dealers in tax‑exempttax-exempt securities. However, to the extent that an investor’s debt would be allocated to purchasing or carrying its shares,Units, such sharesUnits should only be treated as tax‑exempttax-exempt obligations for purposes of the interest disallowance rule in the same proportion as the assets of the Partnership comprise tax‑exempttax-exempt obligations (based on their adjusted tax basis or perhaps capital account value). The Partnership will report to shareholdersUnitholders at the end of each year the average percentage of its assets (based on adjusted tax basis and capital account value) that were invested in obligations believed to be tax‑exempttax-exempt each year. It is uncertain whether an annual average or more frequent adjustments should be used.
Assuming interest on indebtedness is otherwise deductible, the deductibility of a non‑corporatenon-corporate taxpayer’s “investment interest” expense is further limited to the amount of such taxpayer’s “net investment income.”
Allocation of Income, Gain, Loss and Deduction
. In preparing the Partnership’s tax returns, and in determining theThe Partnership generally allocates each item of its income, gain, loss or deduction among the General Partner and shareholdersUnitholders in accordance with their respective percentage interests in the Partnership. However, the Partnership will make certain special allocations in connection with the issuance of new Partnership sharesUnits in accordance with the principles of Section 704(c) of the Internal Revenue Code. Upon the issuance of additional shares,Units, including sharesUnits issued in this offering, the Partnership expects that it will restate the “book” capital accounts of the existing shareholdersUnitholders under applicable Treasury Regulations in order to reflect the fair market value of the Partnership’s assets at the time additional sharesUnits are issued. This restatement of the existing shareholders’Unitholders’ book capital accounts measures any gain or loss inherent in Partnership assets at the time new shareholdersUnitholders are admitted to the Partnership. Section 704(c) requires the Partnership to specially allocate certain items of gain or loss among the shareholdersUnitholders in order to eliminate differences between their book capital accounts (which now reflect the fair market value of Partnership property on the date the new sharesUnits are issued) and their tax capital accounts (which reflect the Partnership’s tax basis in these assets). The effect of the allocations under Section 704(c) to a shareholderUnitholder purchasing sharesUnits in the offering will be essentially the same as if the tax basis of our assets were equal to the fair market value of our assets at the time of the offering.
our tax basis in our assets at the time of the purchase of sharesUnits (“common basis”) and (2) such shareholder’sUnitholder’s Section 743(b) adjustment to that basis. The Section 743(b) adjustment affects only the inside basis of the share purchaser’s portion of Partnership assets and does not affect other shareholders.
A basis adjustment is required under Section 743(b) regardless of whether a Section 754 election is made if sharesUnits are transferred at a time when the Partnership has a substantial built-in loss in its assets immediately after the transfer, or if the Partnership distributes property and has a substantial basis reduction. Generally, a built-in loss or a basis reduction is substantial if it exceeds $250,000.
A Section 743(b) basis adjustment is advantageous to a purchaser of sharesUnits if the purchaser’s outside basis in his or her sharesUnits is higher than such purchaser’s inside basis. In that case, as a result of the election, the purchaser would, among other things, be allocated a greater amount of depreciation and amortization deductions (assuming the Partnership has depreciable or amortizable assets) and his or her allocable share of any gain on a sale of Partnership assets would be less than it would be absent such adjustment. Conversely, a Section 743(b) basis adjustment is disadvantageous to a purchaser of sharesUnits if the purchaser’s outside basis in his or her sharesUnits is lower than such purchaser’s inside basis because it would cause such purchaser to be allocated a lesser amount of the Partnership’s depreciation and amortization deductions and his or her allocable share of any gain on a sale of Partnership assets would be greater than it would be absent such adjustment.
The allocation of any Section 743(b) adjustment among the Partnership’s assets must be made in accordance with the Internal Revenue Code, but will involve a number of assumptions and the application of judgment by the General Partner. Accordingly, the IRS could challenge some of these allocations and, for example, seek to allocate some or all of any Section 743(b) adjustment from tangible assets that may be amortized or depreciated to goodwill or other asset classes that are either nonamortizable or amortizable over a longer period of time. We cannot assure you that the determinations the Partnership makes will not be successfully challenged by the IRS and that the deductions resulting from them will not be reduced or disallowed altogether. Should the IRS require a different basis adjustment to be made, and should, in the opinion of the General Partner, the expense of compliance exceed the benefit of the election, the General Partner may seek permission from the IRS to revoke the Partnership’s Section 754 election. If permission is granted, a subsequent purchaser of sharesUnits may be allocated more income than he or she would have been allocated had the election not been revoked.
Furthermore, strict adherence to Treasury Regulations in making certain Section 743(b) adjustments could result in tax differences among shareholdersUnitholders that adversely affect the continued uniformity of the tax characteristics of shares.Units. As a result, the General Partner has adopted certain 743(b) adjustment methods or conventions that are designed to preserve the uniformity of shares,Units, but that may be inconsistent with certain Treasury Regulations. Please see “—UNIFORMITY OF SHARES,“– Uniformity of Units,” below. Barnes & ThornburgBaird Holm LLP is unable to opine as to the validity of these methods and conventions because there is no clear authority on these issues. If the IRS successfully challenged any method used by the General Partner for making the Section 743(b) adjustments, the uniformity of sharesUnits might be affected, and the gain or loss realized by a shareholderUnitholder from the sale of sharesUnits might be affected.
Uniformity of Shares
The Partnership has adopted reasonable Section 743(b) adjustment methods and other conventions to preserve the uniformity of the intrinsic tax characteristics of shares,Units, none of which should have a material adverse effect on the shareholders. Barnes & ThornburgUnitholders. Baird Holm LLP has not opined on the validity of any of these positions. The IRS may challenge any method of accounting for the Section 743(b) adjustment or other methods or conventions adopted by the Partnership. If any such challenge were sustained, the uniformity of shares,Units, and the resulting gain or loss from the sale of those shares,Units, might be affectedaffected.
Disposition of Shares.Units. There are a number of federal income tax considerations arising from the sale of sharesUnits including:
Recognition of Gain or Loss
. Taxable gain or loss will be recognized on a sale or other disposition ofGain or loss recognized by a shareholder,Unitholder, other than a “dealer” in shares,Units, on the sale or exchange of sharesUnits held for more than one year will generally be taxable as a long-term capital gain or loss.
Allocations Between Transferors and Transferees.
In general, taxable income or loss will be determined annually, will be prorated on a monthly basis and will be subsequently apportioned among theA shareholderUnitholder who owns sharesUnits at any time during a quarter and who disposes of them prior to the record date set for a cash distribution for that quarter will be allocated items of our income, gain, loss and deductions attributable to that quarter but will not be entitled to receive that cash distribution.
Constructive Termination
. The Partnership will be considered to have been terminated for tax purposes if there is a sale or exchange of 50% or more of the total interests in its capital and profits within a twelve-month period. A constructive termination results in the closing of the Partnership’s taxable year for allPartner for services it renders to the borrowers. It is possible that the IRS could contend such fees should be treated as additional taxable income to the Partnership and additional expense. If such position were asserted and upheld, it would result in the Partnership recognizing additional taxable income, but all or a substantial portion of the additional expense would be disallowed. In addition, depending on the amount of such income relative to the Partnership’s other income, it could result in the Partnership being treated as a publicly traded partnership taxable as a corporation.
The IRS may not agree with the Partnership’s determinations as to the deductibility of fees and expenses and might require that certain expenses be capitalized and amortized or depreciated over a period of years. If all or a portion of such deductions were to be disallowed, on the basis that some of the foregoing expenses are non‑deductiblenon-deductible syndication fees or otherwise, the Partnership’s taxable income would be increased or its losses would be reduced.
Treatment of Syndication Expenses.
Backup Withholding
. Distributions toIssuance of Additional Shares
Tax Returns, Audits, Interest and Penalties
. After the end of the calendar year, the Partnership will supply ScheduleState, Local and Foreign Income Taxes
. In addition to the U.S. federal income tax consequences described above,Under the tax laws of certain states, the Partnership may be subject to state income or franchise tax or other taxes applicable to the Partnership. Such taxes may decrease the amount of distributions available to shareholders. ShareholdersUnitholders. Unitholders are advised to consult with their tax advisors concerning the tax treatment of the Partnership, and the effects under the tax laws of the states applicable to the Partnership and its shareholders.
Unitholders.
U.S. federal income tax purposes) that regularly engages in a trade or business which is unrelated to the exempt function of the tax-exempt partner must include in computing its UBTI, its pro rata share (whether or not distributed) of such partnership'spartnership’s gross income derived from such unrelated trade or business. Moreover, such tax-exempt partner could be treated as earning UBTI to the extent that such entity derives from the partnership income from “debt-financed property,” or if the partnership interest itself is debt financed. Debt-financed property means property held to produce income with respect to which there is “acquisition indebtedness” (i.e., indebtedness incurred in acquiring or holding property).
We expect that we will incur “acquisition indebtedness” with respect to certain of our assets. To the extent we recognize taxable income in the form of interest from debt securities with respect to which there is “acquisition indebtedness” during a taxable year, the percentage of such income that will be treated as UBTI generally will be equal to the amount of such income times a fraction, the numerator of which is the “average acquisition indebtedness” incurred with respect to the securities, and the denominator of which is the “average amount of the adjusted basis” of the securities during the period such securities are held by us during the taxable year. To the extent we recognize gain from disposition of securities with respect to which there is “acquisition indebtedness,” the portion of the gain that will be treated as UBTI will be equal to the amount of the gain times a fraction, the numerator of which is the highest amount of the “acquisition indebtedness” with respect to the securities during the twelve-month period ending with the date of their disposition, and the denominator of which is the “average amount of the adjusted basis” of the securities during the period such securities are held by us during the taxable year. In addition, tax-exempt U.S. shareholdersUnitholders may be subject to the AMT with respect to income we receive from any of our debt-financed tax-exemptmortgage revenue bonds.
Because we expect to incur “acquisition indebtedness” with respect to certain of our assets, we expect that tax-exempt shareholdersUnitholders will recognize a significant amount of “unrelated business taxable income” as a result of an investment in our shares.Units. Accordingly, prospective purchasers who are tax-exempt organizations are urged to consult their tax advisors concerning the possible U.S. federal, state, local, and non-U.S. tax consequences arising from an investment in our shares.
Partnerships
. If an entity or arrangement which is treated as a partnership for U.S. federal income tax purposes is aNon-U.S. Shareholders.
For purposes of the following discussion, a “non-U.S. shareholder”Unitholder” is a beneficial owner of our sharesUnits that is neither (i) an individual that is a citizen or resident of the United States, (ii) a corporation (or other entity taxable as a corporation) created or organized under the laws of the United States or any state thereof or the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source, nor (iv) a trust (a) the administration over which a U.S. court can exercise primary supervision and (b) all of the substantial decisions of which one or more U.S. persons have the authority to control.
Non-U.S. shareholdersUnitholders generally will be subject to withholding of U.S. federal income tax at a 30% rate on their allocable sharesUnits of the gross amount of our dividend income, any taxable interest income, rental income, and any other fixed or determinable annual or periodical income received from sources within the United States that is not treated as effectively connected with a trade or business within the United States. The 30% rate may be reduced or eliminated under the provisions of an applicable income tax treaty between the United States and the country in which a non-U.S. shareholderUnitholder resides or is organized, provided the non-U.S. shareholderUnitholder provides the applicable withholding agent with the required certification (generally, on IRS Form W8-BEN). Under the "portfolio“portfolio interest exemption,"” the 30% withholding tax does not apply to certain interest income from obligations
interest. Moreover, a non-U.S. shareholderUnitholder generally will not be subject to U.S. federal income tax on its allocable share of our capital gains unless (i) such gains are effectively connected with the conduct of a U.S. trade or business of such non-U.S. shareholdersUnitholders (and, if an income tax treaty is applicable, such gains are not attributable to a permanent establishment in the United States maintained by such non-U.S. shareholder)Unitholder) or (ii) such non-U.S. shareholderUnitholder is an individual who is present in the United States for 183 or more days during the taxable year and satisfies certain other conditions. In general, gains from U.S. real property interests (including certain rights to contingent interest) are deemed effectively connected with a U.S. trade or business.
Non-U.S. shareholdersUnitholders treated as engaged in a U.S. trade or business are generally subject to U.S. federal income tax at the graduated rates applicable to U.S. persons on their net income which is considered to be effectively connected with such U.S. trade or business. Non-U.S. shareholdersUnitholders that are corporations may also be subject to a 30% branch profits tax on such effectively connected income. The 30% rate applicable to branch profits may be reduced or eliminated under the provisions of an applicable income tax treaty between the United States and the country in which the non-U.S. person resides or is organized.
We expect that our method of operation will result in us generating income treated (or deemed treated) as effectively connected with the conduct of a U.S. trade or business with respect to non-U.S. shareholders.Unitholders. If a non-U.S. shareholderUnitholder were treated as being engaged in a U.S. trade or business in any year because an investment in our sharesUnits in such year constituted a U.S. trade or business, such non-U.S. shareholderUnitholder generally would be required to (i) file a U.S. federal income tax return for such year reporting its allocable share, if any, of our income or loss effectively connected with such trade or business and (ii) pay U.S. federal income tax at regular U.S. tax rates on any such income. Moreover, a corporate non-U.S. shareholderUnitholder generally would be subject to a U.S. branch profits tax on its allocable share of our effectively connected income. In addition, a non-U.S. shareholderUnitholder would be subject to withholding at the highest applicable rate with respect to such non-U.S. shareholder'sUnitholder’s allocable share of our effectively connected income. Any amount so withheld would be creditable against such non-U.S. shareholder'sUnitholder’s U.S. federal income tax liability, and such non-U.S. shareholderUnitholder could claim a refund to the extent that the amount withheld exceeded such non-U.S. shareholder'sUnitholder’s U.S. federal income tax liability for the taxable year. Finally, if we are engaged in a U.S. trade or business, a portion of any gain recognized by a non-U.S. shareholderUnitholder on the sale or exchange of its sharesUnits may be treated for U.S. federal income tax purposes as effectively connected income, and hence such non-U.S. shareholderUnitholder may be subject to U.S. federal income tax on the sale or exchange. To the extent our income is treated as effectively connected income, it may also be treated as non-qualifying income for purposes of the qualifying income exception discussed above under “- TREATMENT OF PARTNERSHIP AS A PUBLICLY TRADED PARTNERSHIP.“– Treatment of the Partnership as a Publicly Traded Partnership.”
In general, different rules from those described above apply in the case of non-U.S. shareholdersUnitholders subject to special treatment under U.S. federal income tax law, including a non-U.S. shareholderUnitholder (i) that has an office or fixed place of business in the United States or is otherwise carrying on a U.S. trade or business; (ii) who is an individual present in the United States for 183 or more days or has a “tax home” in the United States for U.S. federal income tax purposes; or (iii) who is a former citizen or resident of the United States.
Prospective purchasers who are non-U.S. persons are urged to consult their tax advisors with regard to the U.S. federal income tax consequences to them of acquiring, holding and disposing of the shares,Units, as well as the effects of state, local, and non-U.S. tax laws.
Additional Withholding Requirements
. Under the Foreign Account Tax Compliance Act (“FATCA”) enacted as part of the Hiring Incentives to Restore Employment Act, as well as guidance in the form of regulations and other administrative guidance, the relevant withholding agent may be required to withhold 30% of any interest, dividends, and other fixed or determinable annual or periodical gains, profits, and income from sources within the United States paid after June 30, 2014 or gross proceeds from the sale of any property of a type which can produce interest or dividends from sources within the United States paid after December 31, 2016 to (i) a foreign financial institution (for which purposes includes foreign broker-dealers, clearing organizations, investment companies, hedge funds, and certain other investment entities) unless such foreign financial institution agrees to verify, report, and disclose its U.S. accountholders and meets certain other specified requirements or (ii) a non-financial foreign entity that is a beneficial owner of the payment unless such entity certifies that it does not haveany substantial U.S. owners or provides the name, address, and taxpayer identification number of each substantial U.S. owner and such entity meets certain other specified requirements or otherwise qualifies for an exemption from this withholding. Ifwithholding is required under FATCA on a payment, investors that otherwise would not be subject to withholding (or that
Health Care and Reconciliation Act of 2010
. On March 30, 2010, the President signed into law the Health Care and Education Reconciliation Act of 2010, or the Reconciliation Act. The Reconciliation ActOther U.S. Federal Income Tax Considerations
The Internal Revenue Code contains certain provisions that could result in other tax consequences as a result of the ownership of tax-exempt mortgage revenue bonds by the Partnership or the inclusion in certain computations including, without limitation, those related to the corporate Alternative Minimum Tax, of interest that is excluded from gross income.
Ownership of tax‑exempttax-exempt obligations by the Partnership may result in collateral tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, certain foreign corporations doing business in the United States, certain S corporations with excess passive income, individual recipients of social security or railroad retirement benefits and individuals otherwise eligible for the earned income credit. Prospective purchasers of the Partnership’s sharesUnits should consult their own tax advisors as to the applicability of any such collateral consequences.
THE FOREGOING SUMMARYDESCRIPTION OF U.S. FEDERAL INCOME TAX CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND DOES NOT ADDRESS THE CIRCUMSTANCES OF ANY PARTICULAR SHAREHOLDER.UNITHOLDER. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PARTNERSHIP’S SHARES,UNITS, INCLUDING THE APPLICATION OF STATE, LOCAL AND FOREIGN TAX LAWS.
The Employee Retirement Income Security Act of 1974, as amended, or ERISA, and the Internal Revenue Code impose restrictions on (a) employee benefit plans (as defined in Section 3(3) of ERISA); (b) plans described in Section 4975(e)(1) of the Internal Revenue Code, including individual retirement accounts or Keogh plans; (c) any entities whose underlying assets include plan assets by reason of a plan’s investment in such entities (each item described in (a), (b) or (c) being a “plan”); and (d) persons who have specified relationships to those plans, i.e., “parties-in-interest” under ERISA, and “disqualified persons” under the Internal Revenue Code. ERISA also imposes certain duties on persons who are fiduciaries of plans subject to ERISA and prohibits certain transactions between a plan and parties-in-interest or disqualified persons with respect to such plans. Certain federal, state, local, and non-U.S. or other laws or regulations that are similar to the relevant provisions of ERISA or the Internal Revenue Code (“Similar Laws”) may also impose restrictions on employee benefit plans and/or persons who are fiduciaries of plans subject to the Similar Laws.
The Acquisition and Holding of Our Shares
An investment in our sharesUnits by a plan that has a relationship as “parties-in-interest” or “disqualified persons” could be deemed to constitute a transaction prohibited under Title I of ERISA or Section 4975 of the Internal Revenue Code (e.g., the indirect transfer to or use by party-in-interest or disqualified person of assets of a
plan). Such transactions may, however, be subject to one or more statutory or administrative exemptions such as a prohibited transaction class exemption (a ‘PTCE”“PTCE”) including, for example, PTCE 90-1, which exempts certain transactions involving insurance company pooled separate accounts, PTCE 91-38, which exempts certain transactions involving bank collective investment funds, PTCE 84-14, which exempts certain transactions effected on behalf of a plan by a “qualified professional asset manager,” PTCE 95-60, which exempts certain transactions involving insurance company general accounts and PTCE 96-23, which exempts certain transactions effected on behalf of a plan by an “in-house asset manager” or another available exemption. Such exemptions may not, however, apply to all of the transactions that could be deemed prohibited transactions in connection with a plan’s investment.
The Treatment of Our Underlying Assets Under ERISA
The regulations issued by the U.S. Department of Labor concerning the definition of what constitutes the assets of an employee benefit plan (the “plan asset regulations”) provide, as a general rule, that the underlying assets and properties of corporations, partnerships, trusts, and certain other entities in which a plan purchases an “equity interest” will be deemed, for purposes of ERISA, to be assets of the investing plan unless any applicable exceptions applies. The plan asset regulations define an “equity interest” as any interest in an entity other than an instrument that is treated as indebtedness under applicable local law and which has no substantial equity features. Our sharesUnits should be treated as “equity interests” for purposes of the plan asset regulations. As a result, the investment by a plan in our sharesUnits will subject our assets and operations to the regulatory restrictions of ERISA and the Code, including their prohibited transaction restrictions, unless an exception applies. The General Partner believes the Partnership qualifies for an exception under the plan asset regulations that is available to an entity with a class of equity interests that are (a) widely held (i.e., held by 100 or more investors who are independent of the issuer and each other); (b) freely transferable; and (c) part of a class of securities registered under Section 12(b) or 12(g) of the Exchange Act. The General Partner intends to take such steps as may be necessary to maintain the availability of this “publicly offered securities exception” to the plan asset regulations and thereby prevent the Partnership’s assets from being treated as assets of any investing plan. If, however, this or any other exception under the plan asset regulations were not available and the Partnership is deemed to hold plan assets by reason of a plan'splan’s investment in our shares,Units, such plan'splan’s assets would include an undivided interest in the assets held by us. In such event, such assets, transactions involving such assets and the persons with authority or control over and otherwise providing services with respect to such assets would be subject to the fiduciary responsibility provisions of Title I of ERISA and the prohibited transaction provisions of ERISA and Section 4975 of the Internal Revenue Code, and any statutory or administrative exemption from the application of such rules may not be available.
Fiduciary Considerations
Any plan fiduciary that proposes to cause a plan to purchase our sharesUnits should consult with its counsel with respect to the potential applicability of ERISA, the Internal Revenue Code, and Similar Laws to such investment and determine on its own whether any exceptions or exemptions are applicable and whether all conditions of any such exceptions or exemptions have been satisfied.
The foregoing discussion is general in nature and is not intended to be all-inclusive, nor should it be construed as legal advice.
We may sell the sharesUnits offered pursuant to this prospectus and any accompanying prospectus supplements to or through one or more underwriters or dealers, or we may sell these sharesUnits to investors directly or through agents. Any underwriter or agent involved in the offer and sale of our sharesUnits will be named in the applicable prospectus supplement. We may sell sharesUnits directly to investors on our own behalf in those jurisdictions where we are authorized to do so.
Underwriters may offer and sell our sharesUnits at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to the prevailing market prices or at negotiated prices. We also may, from time to time, authorize dealers or agents to offer and sell sharesUnits on the terms and conditions described in the applicable prospectus supplement. In connection with the sale of our shares,Units, underwriters may receive compensation from us in the form of underwriting discounts or commissions and may also receive commissions from purchasers of the sharesUnits for whom they may act as agent. Underwriters may sell these securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions, or commissions from the underwriters or commissions from the purchasers for which they may act as agents.
Units may also be sold in one or more of the following transactions: (a) block transactions (which may involve crosses) in which a broker‑dealerbroker-dealer may sell all or a portion of the sharesUnits as agent but may position and resell all or a portion of the block as principal to facilitate the transaction; (b) purchases by a broker‑dealerbroker-dealer as principal and resale by the broker‑dealerbroker-dealer for its own account pursuant to a prospectus supplement; (c) a special offering, an exchange distribution or a secondary distribution in accordance with applicable NASDAQ or stock exchange rules; (d) ordinary brokerage transactions and transactions in which a broker‑dealerbroker-dealer solicits purchasers; (e) sales “at the market” to or through a market maker or into an existing trading market, on an exchange or otherwise, for shares;Units; and (f) sales in other ways not involving market makers or established trading markets, including direct sales to purchasers. Broker‑dealersBroker-dealers may also receive compensation from purchasers of sharesUnits which is not expected to exceed that customary in the types of transactions involved.
Any underwriting compensation paid by us to underwriters or agents in connection with the offering of shares,Units, and any discounts or concessions or commissions allowed by underwriters to participating dealers, will be set forth in the applicable prospectus supplement. Dealers and agents participating in the distribution of sharesUnits may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of the sharesUnits may be deemed to be underwriting discounts and commissions.
Underwriters, dealers, and agents may be entitled, under agreements entered into with us, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act. Unless otherwise set forth in the accompanying prospectus supplement, the obligations of any underwriters to purchase any sharesUnits will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all of the sharesUnits then being sold, if any is purchased.
Underwriters, dealers, and agents may engage in transactions with, or perform services for, us and our affiliates in the ordinary course of business.
In connection with the offering of sharesUnits described in this prospectus and any accompanying prospectus supplement, certain underwriters, selling group members, and their respective affiliates may engage in transactions that stabilize, maintain or otherwise affect the market price of the security being offered. These transactions may include stabilization transactions effected in accordance with Rule 104 of Regulation M promulgated by the SEC pursuant to which these persons may bid for or purchase securities for the purpose of stabilizing their market price.
comparable transactions that are described in any accompanying prospectus supplement may result in the maintenance of the price of our sharesUnits at a level above that which might otherwise prevail in the open market.
Our sharesUnits are listed on the NASDAQ Global Select Market under the symbol “ATAX.” Any underwriters or agents to or through which sharesUnits are sold by us may make a market in our shares,Units, but these underwriters or agents will not be obligated to do so and any of them may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of or trading market for our shares.
Because the Financial Industry Regulatory Authority, Inc. (“FINRA”FINRA”) views our sharesUnits as interests in a direct participation program, any offering of sharesUnits under the registration statement of which this prospectus forms a part will be made in compliance with Rule 2310 of the FINRA Conduct Rules.
To the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution. The place and time of delivery for the sharesUnits in respect of which this prospectus is delivered will be set forth in the prospectus supplement relating thereto.
The validity of the Units offered by this prospectus has been passed upon for us by Barnes & Thornburg LLP, Indianapolis, Indiana. The description of federal income tax consequences in “U.S. Federal Income Tax Considerations” is based on the opinion of Baird Holm LLP, Omaha, Nebraska.
The consolidated financial statements as of December 31, 2015 and 2014, and for each of the three years in the period ended December 31, 2015 incorporated in this Prospectus by reference from America First Tax ExemptMultifamily Investors, L.P.'s’s Current Report on Form 8-K filed on November 2, 2016, and the effectiveness of America First Multifamily Investors, L.P.’s internal control over financial reporting incorporated in this Prospectus by reference from America First Multifamily Investors, L.P.’s Annual reportReport on Form 10-K for the year ended December 31, 2012 and the effectiveness of America First Tax Exempt Investors, L.P.'s internal control over financial reporting have2015, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports dated March 8, 2013,report (which report expresses an unqualified opinion on the consolidated financial statements and includes explanatory paragraphs referring to the fair value estimates of certain assets, and retrospective adjustments for a segment change and the adoption of guidance related to the presentation of deferred financing costs), which are incorporated herein by reference. Such consolidated financial statements have been so incorporated in reliance upon the respective reports of such firm given upon their authority as experts in accounting and auditing.
We file annual, quarterly, and special reports, and other reports and information with the SEC. You can obtain any of our filings incorporated by reference into this prospectus from the SEC at
We have filed a registration statement, of which this prospectus is a part, covering the securities offered hereby. As allowed by SEC rules, this prospectus does not contain all the information set forth in the registration statement and the exhibits, financial statements, and schedules thereto. We refer you to the registration statement, the exhibits, financial statements, and schedules thereto for further information. This prospectus is qualified in its entirety by such other information.
We maintain an Internet website at
SEC rules allow us to “incorporate by reference” into this prospectus the information we file with the SEC. This means that we can disclose important information to you by referring you to the documents containing the information. The information we incorporate by reference is considered to be included in and an important part of this prospectus and should be read with the same care. Information that we later file with the SEC that is incorporated by reference into this prospectus will automatically update and supersede this information. We hereby incorporateare incorporating by reference into this prospectus:
our Annual Report on Form 10-K for the fiscal year ended December 31, 2012;2015;
our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, and June 30, 2013;and September 30, 2016;
our Current Reports on Form 8-K filed with the SEC on January 13, January 20, February 17, March 11, March 31, May 6, May 19, June 13, 2013July 13, August 9, August 24, September 13, September 21, October 6, and June 12, 2013; andNovember 2, 2016;
the description of our sharesbeneficial unit certificates representing assigned limited partnership interests contained in our Registration Statementregistration statement on Form 8-A filed with the SEC on August 27, 1998, as such description was amended on October 31, 2016, together with any further amendment or report filed with the SEC for the purpose of updating such description.
In addition, we also incorporate by reference into this prospectus all documents and additional information that we may subsequently file with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act after the initial filing of the registration statement of which this prospectus is a part (including prior to the effectiveness of the registration statement) and prior to the termination of theany offering. These documents include, but are not limited to, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as well as proxy statements, if any. Any statement contained in this prospectus or in any document incorporated, or deemed to be incorporated, by reference into this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any subsequently filed document that also is or is deemed to be incorporated by reference into this prospectus modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus and the related registration statement. Notwithstanding the foregoing, unless specifically stated to the contrary, none of the information we disclose under Items 2.02 or 7.01 of any Current Report on Form 8-K that we may from time to time furnish to the SEC will be incorporated by reference into, or otherwise included in, this prospectus.
We will provide without charge to each person, including any beneficial owner of our shares,Units, to whom this prospectus is delivered, upon written or oral request, a copy of any and all documents that have been incorporated by reference into this prospectus but not delivered with this prospectus (without exhibits, unless the exhibits are specifically incorporated by reference but not delivered with this prospectus). Requests should be directed to:
Mr. Timothy FrancisThe Craig S. Allen
Burlington Capital, Group LLC
1004 Farnam Street, Suite 400
Omaha, Nebraska 68102
(402) 444-1640
You should rely only on the information and representations in this prospectus, any applicable prospectus supplement, and the documents that are incorporated by reference. We have not authorized anyone else to provide you with different information or representations. We are not offering these securities in any state where the offer is prohibited by law. You should not assume that the information in this prospectus, any applicable prospectus supplement, or any incorporated document is accurate as of any date other than the date of the document.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth below are the various expenses, other than underwriting discounts and commissions,commission, expected to be incurred in connection with the issuance and distribution of the sharessecurities being registered. With the exceptionregistered hereby, all of which will be borne by America First Multifamily Investors, L.P. All amounts shown are estimates except for the SEC registration fee, the amounts set forth below are estimates. All expenses will be paid by the Company.fee.
SEC registration fee |
| $ | 10,733 |
|
NASDAQ filing fee |
|
| * |
|
Accounting fees and expenses |
|
| 15,000 |
|
Legal fees and expenses |
|
| 17,000 |
|
Printing |
|
| * |
|
Miscellaneous |
|
| 5,000 |
|
Total |
| $ | 47,733 |
|
* | These fees and expenses are calculated based on the number of issuances and amount of securities to be offered, and accordingly cannot be estimated at this time. |
| SEC registration fees | $ | 30,000 | |
| NASDAQ Filing Fee | * | ||
| Legal fees and expenses | * | ||
| Accounting fees and expenses | $ | 15,000 | |
| Printing | $ | 10,000 | |
| Miscellaneous | $ | 5,000 | |
| TOTAL | * | ||
Item 15. Indemnification of Directors and Officers.
Section 17-108 of the Delaware Revised Uniform Limited Partnership Act empowers a Delaware limited partnership to indemnify and hold harmless any part or other person from and against any and all claims and demands whatsoever, subject to any terms, conditions, or restrictions set forth in the partnership agreement. The Registrantregistrant has no directors or officers. Indemnification of the Registrant’sregistrant’s general partner and its affiliates (including the officers and managers of The Burlington Capital, Group L.L.C.,LLC, the general partner of the general partner of the Registrant)registrant) is provided in Section 5.09 of the Registrant’sregistrant’s First Amended and Restated Agreement of Limited Partnership, which is listed as Exhibit 4.24.1 of Item 16 of this Registration Statement and such section is incorporated by reference herein.
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Exhibit Number | Description | |
1.1* | ||
Form of Underwriting | ||
4.1 | America First | |
4.2 | First Amendment to First Amended and Restated Agreement of Limited Partnership of America First Multifamily Investors, L.P. dated March 30, 2016 (incorporated herein by reference to Exhibit 3.1 to Form 8-K (No. 000-24843), filed by the registrant on March 31, 2016). | |
4.3 | Second Amendment to First Amended and Restated Agreement of Limited Partnership of America First Multifamily Investors, L.P. dated May 19, 2016 (incorporated herein by reference to Exhibit 3.1 to Form 8-K (No. 000-24843), filed by the registrant on May 19, 2016). | |
4.4 | Certificate of Limited Partnership of America First Multifamily Investors, L.P. (f/k/a America First Tax Exempt Investors, L.P.) (incorporated herein by reference to Exhibit 3.1 to Form 8-K (No. 000-24843), filed by the registrant on November 12, 2013). | |
4.5 | Amendment to the | |
4.6 | Articles of Incorporation and Bylaws of America First Fiduciary Corporation Number Five (incorporated herein by reference to | |
4.7 | Form | |
4.8 | Amended Agreement of Merger, dated June 12, 1998, between the registrant and America First Tax Exempt Mortgage Fund Limited Partnership (incorporated herein by reference to Exhibit 4.3 to Amendment No. 3 to Registration Statement on Form | |
5.1** | Opinion of Barnes & Thornburg LLP | |
8.1** | Opinion of | |
23.1** | Consent of Deloitte & Touche LLP. | |
23.2** | Consent of Barnes & Thornburg LLP (included in | |
23.3** | Consent of Baird Holm LLP (included in Exhibit 8.1). | |
24.1** | Powers of Attorney (included on |
* | To be filed by amendment or pursuant to a report to be filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, if applicable. |
** | Filed herewith. |
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The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(1) To include any prospectus required by Section 10(a)(3) of the Securities Exchange Act of 1934, as amended,1933;
(2) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, applicable.
(3) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
Provided, however, that, paragraphs (a)(1)(i), (a)(1)(ii)(2), and (a)(1)(iii)(3) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SECCommission by the Registrantregistrant pursuant to Sectionsection 13 or Sectionsection 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is a part of the registration statement.
(b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(d) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(1) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(2) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or
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modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(e) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(1) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(2) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(3) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(4) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(f) The undersigned Registrantregistrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’sregistrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this Registration Statementthe registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(g) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrantregistrant pursuant to the foregoing provisions, or otherwise, the Registrantregistrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrantregistrant of expenses incurred or paid by a director, officer or controlling person of the Registrantregistrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, hereunder, the Registrantregistrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(h) The undersigned Registrantregistrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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Pursuant to the requirements of the Securities Act of 1933, the Registrantregistrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S‑3S-3 and has duly caused this Registration Statementregistration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on the 5th day of September` 2013.November 16, 2016.
AMERICA FIRST MULTIFAMILY INVESTORS, L.P. | ||
By: | America First Capital Associates Limited Partnership Two, General Partner of the Registrant | |
By: | Burlington Capital, LLC, General Partner of America First Capital Associates Limited Partnership Two | |
By: | /s/ Lisa Y. Roskens | |
Lisa Y. Roskens, Chief Executive Officer | ||
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby authorizes Mark A. Hiattconstitutes and Timothy Francis,appoints Craig S. Allen and Chad L. Daffer, and each of them, either of whom may act without the joinder of the other, as such person'sperson’s true and lawful attorney‑in‑fact and agent, with full power of substitution, to sign on his or her behalf, individually and in each capacity stated below, any amendment, including post‑effective amendments, to this Registration Statement,registration statement, including any registration statement filed pursuant to Rule 462(b) which is related to this Registration Statement,registration statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them or their substitutes, may lawfully do or cause to be done by virtue hereof.
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Pursuant to the requirements of the Securities Act of 1933, this Registration Statementregistration statement has been signed below by the following persons in the capacities andindicated on the dates indicated.
Signature | Title | Date | |||||
/s/ | |||||||
Chad L. Daffer | Chief Executive Officer of the Registrant (Principal Executive Officer) | November 16, 2016 | |||||
/s/ Craig S. Allen | |||||||
Craig S. Allen | |||||||
Chief Financial Officer of | November 16, 2016 | ||||||
/s/ Michael B. Yanney | |||||||
Michael B. Yanney | Chairman Emeritus of the Board and Manager of | November 16, 2016 | |||||
/s/ Lisa Y. Roskens | |||||||
Lisa Y. Roskens | Chairman of the Board, President, Chief Executive Officer, and Manager of | November 16, 2016 | |||||
/s/ Mariann Byerwalter | |||||||
Mariann Byerwalter | Manager of Burlington Capital, LLC | November 16, 2016 | |||||
/s/ William S. Carter | |||||||
William S. Carter | Manager of Burlington Capital, LLC | November 16, 2016 | |||||
/s/ Patrick J. Jung | |||||||
Patrick J. Jung | Manager of Burlington Capital, LLC | November 16, 2016 | |||||
/s/ George H. Krauss | |||||||
George H. Krauss | Manager of Burlington Capital, LLC | November 16, 2016 | |||||
/s/ Gail Walling Yanney | |||||||
Gail Walling Yanney | Manager of | November 16, 2016 | |||||
/s/ Mike Johanns | |||||||
Mike Johanns | Manager of Burlington Capital, LLC | November 16, 2016 | |||||
/s/ W. Kimball Griffith | |||||||
W. Kimball Griffith | Manager of Burlington Capital, LLC | November 16, 2016 |
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Exhibit Number | Description | ||
1.1* | |||
Form of Underwriting | ||
4.1 | America First | |
4.2 | First Amendment to First Amended and Restated Agreement of Limited Partnership of America First Multifamily Investors, L.P. dated March 30, 2016 (incorporated herein by reference to Exhibit 3.1 to Form 8-K (No. 000-24843), filed by the registrant on March 31, 2016). | |
4.3 | Second Amendment to First Amended and Restated Agreement of Limited Partnership of America First Multifamily Investors, L.P. dated May 19, 2016 (incorporated herein by reference to Exhibit 3.1 to Form 8-K (No. 000-24843), filed by the registrant on May 19, 2016). | |
4.4 | Certificate of Limited Partnership of America First Multifamily Investors, L.P. (f/k/a America First Tax Exempt Investors, L.P.) (incorporated herein by reference to Exhibit 3.1 to Form 8-K (No. 000-24843), filed by the registrant on November 12, 2013). | |
4.5 | Amendment to the | |
4.6 | Articles of Incorporation and Bylaws of America First Fiduciary Corporation Number Five (incorporated herein by reference to | |
4.7 | Form | |
4.8 | Amended Agreement of Merger, dated June 12, 1998, between the registrant and America First Tax Exempt Mortgage Fund Limited Partnership (incorporated herein by reference to Exhibit 4.3 to Amendment No. 3 to Registration Statement on Form | |
5.1** | Opinion of Barnes & Thornburg LLP | |
8.1** | Opinion of | |
23.1** | Consent of Deloitte & Touche LLP. | |
23.2** | Consent of Barnes & Thornburg LLP (included in | |
23.3** | Consent of Baird Holm LLP (included in Exhibit 8.1). | |
24.1** | Powers of Attorney (included on | |
* | To be filed by amendment or pursuant to a report to be filed pursuant to Section 13 or 15(d) of |
** | Filed herewith. |
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