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ATAX America First Multifamily Investors

Participants
Ken Rogozinski Chief Executive Officer
Jesse Coury Chief Financial Officer
Jason Stewart JonesTrading
Call transcript
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Operator

I would like to welcome every to America First Multifamily Investors, L.P.'s NASDAQ ticker symbol ATAX Second Quarter 2021 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. After management presents its overview of Q2 2021, you will be invited to participate in a question-and-answer session.

As a reminder, this conference call is being recorded.

During this conference call, comments may regarding ATAX, which are not historical facts are forward-looking statements and are subject to risks and uncertainties, that could cause the actual future events of results to defer materially from these statements. pursuant Litigation Safe Reform are the provision statements Securities Private Act forward-looking to Harbor the of Such of XXXX.

be expect, and can like statements identified use the Forward-looking of may, could, similar plan, other focus, intend, terms. by words

implied results statements those the You only the today's today. cause COVID-XX by business, regulatory pandemic as economic, expressed including factors, actual speak and are could in these other forward-looking Changes to the or of from statements that competitive, cautioned or defer forward-looking materially date. impact projections ATAX's of made

will projections risks explained to FD you discussion want measures Rogozinski, would information and may non-GAAP Regulation you I the bases ATAX For these advantage will Today's documents time Chief call. will Exchange do more detailed may and to about expectations, ATAX you and encourage its SEC to and aware informed. Internal like with of of the We make turn reports you ATAX's factors to filed but participation not review beliefs, Officer and please upon session. ATAX if other time be include they in to and by that take which interest be business, operating from the for Thank necessarily change, over other impact question-and-answer that ATAX. now ATAX. full and is under the call during your Executive Securities the periodic Commission. Ken

Ken Rogozinski

our the and partnership's First our call. Thank you Officer results. will present Good Coury, overview give I Multifamily Chief L.P. investor business markets, financial will Welcome XXXX for afternoon Investors and everyone. the Jesse Financial to of second then America joining. quarter an

your look we Following forward taking that, to questions.

providers. book certificate XXXX, the a the net unit distribution The XX%. as of our leverage $X.XX of all of by in quarter of second good of $X.XX standing $X.XX BUC, per and BUC with defined and ATAX $X.XX cash per partnership BUC, assets for billion value and is per beneficial a of partnership of leverage or available income For ratio current reported on lenders

the all principal have received on and are portfolio, of no current multifamily bonds our terms request interest forbearance MRBs mortgage multifamily partnership's payments. revenue on In for and we investment

reported January that XX% as as multifamily of XXXX XXXX. occupancy Our collections rate billing serve approximately of for the for MRBs, from averaged XXXX. our June properties XX XX, by collateral through averaged days with XX% has Physical June portfolio

is others, XX portfolio Vantage or construction seven where planning projects, where complete construction current still consists and Our of underway. six is XXX%

complete, over properties the where see physical is the July. For seven of leasing construction with XX% having XXX% seven good the of achieved end of as we activity occupancy continue to four

continue projects under see to chain no or Vantage construction. the We still on labor material disruptions supply

managing seen the property in upon have a we the As as Vantage stabilization. of the for sale each group, entity, member project owning past, position will

service. operating expenses Our all semester XXXX of case at to XX/XX two Both University owned San for in which debt cash obligations flow, their their of properties year, approaching academic on-campus term. of Nebraska their the from new learning. and including of a the be of now lease standard have the Nebraska housing State in-person the primarily with are University fall Diego and intentions announced Both start student coincides project covering are

in-person results announced evaluate San to housing of and leasing Hopkins The pre-leased two for that transitioned student this the of facilities similar housing MRB options outcomes our Apartments in XX% the has third-party once years are they Nebraska units resumption recently those final fall. property bankruptcy to University expect potential Johns borrower University, the XXXX outright University pre-leasing today existing Maryland broad credit or on felt the principal The State stands are Those for options existing quarter. pandemic. of and runs the Johns assets. over manages which XXXX known. need their entered the budgeting property of being Live else XXXX restructuring classes for regard actively Hopkins Diego, this a end on additional XXXX. agreement the same be XXX of of are its process reversion through we student case or at at appropriate other the time. forbearance for The a debt still at of managers we into management the has provision XX% something bankruptcy impairment the process. performance. through have property centers Lokey On approximately Economic part of filed processed. COVID-XX Corporation's the in fourth XXXX as to seen forbearance pre-pandemic evaluated debtor owner to the therapy work center could prior is entirely. Houlihan borrower with Pre-leasing a leasing bond with XXXX at consistent Live with both that way the bankruptcy that to as currently Chapter XX court company Fall an make proton to additional Based XXX semester same continues lease portfolio an sale that manager amortization of either center The the loss the two Our be XXXX The with it Development Knoxville of to and retained will MRB Like applications quarter their and

of market brought of mutual the strong last quarter XXXX inflows their for in fund bonds. second modest municipal year. since have continued bond Municipal improvement The a performance March

had market has its a impact lower last treasuries high-grade to at Of bond point week in all-time That market. was continue $XX X.XX% low MMD X.XX% X.XX% the a index highest is This data. first positive inflows ever Barclays of environment, level hit saw the a level than XXXX Lipper XXXX. muni directed past XXXX billion billion relatively and XX-year be flows to X.XX%. a $XX MMD months can muni low-interest-rate on mindful according billion investments. of of six where currently basis at year unrated through to scale municipal non-investment-grade index that roughly XX-year the the for originate we half $XX in we and X.XX%. with reached since of high-yield XX rally in XX-year funds. yield lowest absolute currently at and Municipal the for is of still to XX-year at X% bonds is Refinitiv we new Since muni are yields Bloomberg fixed-income muni approximately rates the almost data's level XX quarter. recent of mid-August bond First at The index in

continued where hedging readily funding on is investments duration focus our is have shorter costly. We more less match available and

during previously LIHTC In closed had a our of terms investment largest In in during July our to new closing on million on project construction the for May's rehab second in date early-April quarter financing the Orlando. call activity we financing $XX longer-term project on transaction Mississippi. an debt I mentioned construction LIHTC acquisition a

the lending membership $X.XX conjunction CAD We both property with located the in May the of continue recognized see our was interest income market per South The net XXXX, In segments. in partnership of BUC and sale. Vantage sold. Carolina of in opportunities a to result Powdersville redemption as at Powdersville

XXXX, acquisition last Front our first This in investment mentioned with project located of by new quarter's is the Later closed area the Loveland Colorado I Range one San the Fair closed our on which the April Oaks. site we San investment Vantage Helotes of the locations. a call followed Antonio in in Vantage at at during quarter Vantage on Vantage was and portfolio Vantage Colorado. development second in Antonio diversification second As of market we for the another Vantage on equity project continues for in a

work continue over to opportunities sources where available. I turn may on XXXX. look strategically to to Jesse that for of traditional not second our our currently discuss with financial strongest sponsors Coury, new will the to quarter things With We of the data be capital CFO will investment

Jesse Coury

you, Thank Ken.

basic we per reported diluted for CAD of On income BUC or unit of second a cash revenues reported XX basis, up per CAD three distribution investment and million, We of of mortgage Net the California We total representing per revenue per based states we per $X.XX three outstanding portfolio, currently related revenues $X.XX basic million. diluted assets our and spread XX% being bonds spread XX%. available states. reported volume $XX.X principal of classes; XXXX, the $X.XX Texas For portfolio; representing or properties. billion of as Carolina main we and to beneficial total in BUC. certificate make $X.XX $X.XX BUC and properties net BUC net XX. MRBs and MRBs and income net Vantage with hold assets Such of across year-to-date South of BUC. total $XX.X hold of a XX or in on each and significant our first, In MF our our third, June investments; second, quarter our

to-date the mentioned, in have associated the Live housing Ken for MRBs interest Apartments of forbearance with no properties. principal As we payments forbearance student In request for associated multifamily -- we multi Baltimore, for XXX with and granted XXXX, MRB received with Maryland. property

pandemic. Forbearance the property the consisted recovers of of the COVID-XX effects the deferral from through payments of contractual XXXX, principal while

a center As proton of bond -- the Chapter for petition mortgage with semester, in Knoxville, pace XXXX XX XX% our protection Fall borrower lease Tennessee Center of is the trends. in Provision a located upcoming center December mid-July filed which is The property on treatment for pre-COVID bankruptcy leased revenue XXXX. therapy

additional the the process on As the recognized senior process. we an quarter options in forbearance reorganization outcomes and with potential are second impairment of debtor bondholders. the of Ken the assessing bankruptcy is through of XXXX evaluation charge $XXX,XXX other based mentioned, restructuring our borrower working We and

affordable As million. construction issuer have totaling seven XX multifamily and finance the a in stabilization lease-up loans, of MRBs on $XXX are and they GILs are of GILs or states our affordable we personal and governmental of authorities, and investments secured The equivalent obligations properties investments to to in June functionally that are governmental by four by multifamily mortgage real properties. property issued the non-recourse

also expect federal property GILs interest tandem typically advanced. and with instances, loans is exempt are GILs after the believe tax. in earned to on We mortgage share have fund been the lean income most our that In GIL from and first funds we all commit funded

Such outstanding totaling commitments during in just we the the be additional commitments affordable that new we of property for construction. fund July new million. the GIL XX, I funding Orlando, the and loan will Florida commitments million advanced property New property for related a amounts $XX commitments multifamily periods $XXX of investments XXXX. listed to As are in loan totaling June and Not proceeds had of construction reflected GIL closed

GIL the are GIL we Also TOB construction. property a for investments during and commitments will Trust funded advanced be financing will we to $XX.X XX the leverage new fund be in and as property loans into commitments. respectively our and and Our July, million, entered loan funds and -- investment

additional projects totaled as two and the June, nine Of as Nebraska, on to portfolio. occupancy aggregate July. X,XXX construction COVID-XX phase. two properties portfolio end basis. which our disruptions in construction. two of the investments rental XX Vantage of been properties in the XX% XX are the of The or delays under with of are basis. for over exclusive Two currently are consolidated Vantage Moving six achieved a two in of each a on completed All exceeding Seven value XX Vantage investments construction Tennessee no of or Carrying Colorado. physical of the material that XX% units. multifamily have the the of represent of projects planning projects, for in occupancy June to Texas, consolidated are as market-rate XXth investments lease-up under due June projects complete over There by reported in million XXth in and of and investments reported either the $XX properties current and are have one consists

our Ken May returned million property we was Vantage at and Carolina the sold investment our redeemed. $XX.X capital million mentioned, equity investment South XXXX redemption, $X.X realized As our of was initial in and in Powdersville was is generated Upon $X.X approximately has income of which aggregate and gain This interest have gains and $XX date. been a investment that in to contingent the upon Vantage investment million of on eighth sales million sale. redeemed,

portfolio. properties MF our to Moving

As general housing, in-person approximately mortgage velocity student million. value Both net classes market. properties for MF have continue two COVID-XX with universities San operations. on attempt leasing students of are college total June provide Property fall respectively. semester of pre-COVID MF with significantly and resume and a to housing properties of Both we serve housing been more of XXXX student the direct Paseo the operating The fall impacted cash has and the MF University and of with semester. properties all a suit for MF XXth, the units $XX obligations than by Property, which and carrying is relatively levels. primarily State meet to owned Nebraska Both XX-XX XXX Both announced University the Diego consistent leasing on-campus their from properties XXXX multifamily

interest be we without rates for financial to rate rate in Of swaps. roughly commitments. June the interest $XXX of with totaled XXXX, new partially side caps credit June line The a our and Paseo in of bank calculation. financing, are MRBs, additional investments, Proceeds interest approximately one financings or line is two to our sheet, facility debt the loans, provide variable XX% TOB debt need a Moving is the of investments various as MRB $XXX liquidity Property working of by up investment MF financing obtained debt by Of related least and XX% million XXth. such secured Trust purchase In and use flexibility to meeting the fixed-rate variable our our our $XXX priority and the subject rate. rates as property we interest hedging and such new investments financing, secured gross million of quarter suites XXXX, that of property is credit or one-third leverage which GIL base a first to of capital liability debt hedged instruments needs. to account. in million interest general separate received from borrowing against balance Vantage our they rising loan In million of for our of institutions secured to to GILs and $XX and variable second million security continued with on used proceeds we $XXX $XX at will million funding is investments our

net Partner line secured Our report monitor demonstrating $XX.X unused as fee a of that shows continuing analysis support that affiliate increase Select approximately result per interest assumptions the immediate regularly Greystone for interest BUC. to interest our million basis on for General rates. changes to LLC, on interest an capacity The XX-Q. provided ATAX's on various rates will a of deficiency The XXX in XX rate sensitivity did those quarterly and in deficiency table point an $X.XXX increases charge Greystone's shows sensitivity in rates Holdings we of the net included a we impact is sustained ATAX's that our most has market or interest Greystone under do recent facility. interest in decrease an $X.X million connection page in was the with and XX-month XXth. interest rise CAD in June XX through of guarantee, that Holdings based of period obligations These ATAX's assume and the credit not income is Select nothing for which rates guarantee response the is immediate income in of in scenarios operations. exposure scenarios our our approximately potential given rate We analysis, our there Form months. of

regularly XX. as up value we our was which $X.XX $X.XX, of per as from Lastly, of provide June is slightly book which March BUC XX net

the premium per was I on With the of to NASDAQ from now on $X.XX price Our XX%. and market value which questions that happy approximately is BUC, Ken answer a closing to June book audience. are XX our

Operator

Stewart, Jason begin now have will Please your JonesTrading question-and-session from And ahead. is we line Instructions] [Operator you open. Jason the Stewart. Thank go we

Jason Stewart

to All it. right. My bad. you Yes unmute got

really that more is about sorry side. -- affordable the on question First

ATAX. we've I've do you heard time anything think -- the from about forward? really first never So is affordable going What strategy there

Ken Rogozinski

the I affordability core the in terms is GIL of of MRB Jason, investments. Well and think, that the focus really

associated charge. are in level order All has rents incomes tax-exempt the There tenant owners the have some the them cases project in regulatory it. agreements restrict underlying debt of most ability of can them to affordability for both that have and the issued to that with

to have is, we I I value where country. to add can around something So a we're historically debt that that's to an think the sponsors that been project on. focus that we've investor perspective, going we continue From think

to I debt And the our on so perspective be continue side. a will think from that focus

On that investments. results that the strategy with Vantage we team projects. side, pleased from and been There regulatory income with though rent Vantage those the or traditional agreement or are market-rate We've to tenant is associated see no those have those. been able and restrictions

there time approach any change point market-rate So a of in at approach. this least to affordable I from don't at kind foresee an

Jason Stewart

How you've that? accomplish you help does achieved the new rating that

Ken Rogozinski

from that this unsecured KBRA's -- week business our them what perspective think something the base. underlying really rating of to BB+ hard is of we pleased team educate see It's of with educate feel senior I worked the were we that our announcement strong quality we investment about credit. them our partnership's the earlier to the about

of unsecured public develop so think able door absent days the lenders see might our view to on to necessarily with will below have who to just notch that will of capacity, beneficial out us kind and It's our and counterparties, relationship help side liquidity to one help existing saw us of terms have not our new result with credit them for with and I our lenders for existing third-party grade. will credit. it for sort at open senior counterparties new the our and it having It this credit for of we time. has in with that a four credit dialogue goal market. by us that is And rating It this with only hopefully in was pricing point be view us facilities. of of that us focused that's But that been news investment the our with public there

Jason Stewart

resilient -- two it. sheet. the like then at When mean pivoting on you the to look on really minus sort interest I do plus of rates on minus XX X% Got Okay. X% or to a overall balance -- like years. to or we exposure to and any let's think get ATAX? move? What say, this then lean the And the incredibly has seems it you is plus exposure to number

Ken Rogozinski

give to you there detail. things of couple Jason, a more little A

add first as the you think and I want to color well. is I'd here any Jesse appreciate --

is in point of of amount that fair to The that, redeemed the be drawn, sort a that that not last to we Mizuho a draw volatility sure that is that financing. If year, will of result analysis analysis. balance and be that think because those in will debt, on be Since first undrawn months of this cost of note the have a in in at time we left closing you to see time how we going I put the at think of weren't didn't secured able of we as that of were another is proceeds that notes on August hedge nine that facility. got We've our I long-term significant sure that weren't improvement much of fully transaction any used.

we'll significantly to potential redemption as interest an does now there a that how in I is And that those increase analysis significant that a improvement analysis. happen, cost in works result of increase if that's see secured right because a so adding think notes of rates

block one tender going other thing funded fund as those We counterparties. That positions. warehouse is probably an through that of how for worth we to we're have from to million solution that roughly long-term is going investment got our that auction MRBs perspective, $XX be our view financing. of not The capital we've

other that them like strategy and tenant's get do we have form virtual as trust to [Technical these fully a now previously. four that aggregate can done We in place, we assets Difficulty] the we've times

useful long-term once assets, we'll match sort we to this at [Technical deal of those much think be again, tighter that's decide I be bill for what funding So interest point. have funding the more a is to Difficulty] going a of rate

Jason Stewart

What's for best core of the your Okay. Last right ROE terms in jump me one guess and out. now? of MRB I'll

Ken Rogozinski

that's it question difficult both which funding lot new to a the us a XX-year issuer counterparties the MRB vehicles that and in that. are are Jason cost tenure is answer for permanent governmental loans structured lot also a are of longer-term roughly of whether is doing financing as That's what go vehicles construction are because facility. being what It we're those what a construction into on things the XX a liquidity are a to terms there the and vehicle, it's from LIHTC rates the Part on credit of of that depends the our versus advance XX-month where from well. on deal

the each can't is our transaction. I are the So make yield I side everything are can on both much that we based the level But only is MRB firm doing transactions those to blanket pretty where give GIL additional really at the what I ROEs the that dividend are. of level. current different and you for accretive analysis one side levered partnership a think on they statement

Jason Stewart

Thank Appreciate you. it.

Operator

[Operator Instructions] moment. questions Looks Okay. no at further the like

Ken Rogozinski

Well, Thank Okay. us again and you with look next forward to we'll you. quarter. you joining for everyone speaking thank

Operator

for and gentlemen, concludes Thank conference. today's joining. you Thank this you. Ladies

You may now disconnect.