ATAX America First Multifamily Investors

Ken Rogozinski Chief Executive Officer
Jesse Coury Chief Financial Officer
Jason Stewart JonesTrading
Call transcript
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On behalf of ATAX and its management team, I'd like to welcome everyone to America First Multifamily Investors, L.P.'s, NASDAQ ticker symbol, ATAX, Third Quarter of 2021 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded.

During this conference call, comments made 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 or results to differ materially from these statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

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

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

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

Ken Rogozinski

third give Officer call. partnerships Jesse quarter then and Good afternoon present an Chief markets. business investor everyone. our I results. America our Financial Welcome of the XXXX to Coury, LPS you investors financial the overview for Multifamily Thank First joining. will will And

questions. look we forward Following to taking your that,

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

received on revenue portfolio, current investment the portfolio multifamily occupancy XX, XXXX. In terms interest forbearance MRBs have as the projects multifamily XX% Partnerships mortgage we underlying and principal for the average requests Physical no MRB for payments. on of on bonds, of and are September all our

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

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

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

As each we the position three with and date Texas million million Member projects as upon the stabilization. gains return, of Hydro capital a have for Marcos, project Managing capital. million returning been need to million. projects sold and original land own in owning a for have in $XX.X Texas multiple four past we roughly a seen in X.XXx invested the capital contributed Vantage and property projected preferred and San Vantage $XX invested $XX.X in sale still investment group Vantage of To and in date entity will us projects XXXX, additional XXXX, have in on To $XX.X

of operating obligations at Nebraska Both on case XX/XX the the flow, San started Our learning. year, the with Both are from University including housing are terms. primarily State standard owned their cash coincides of expenses Nebraska student lease all have debt campus project in covering in and Diego and two properties new holding academic their service. which person University of of

further debt filed the in entirely. waiting continues Lokey pandemic. There party of the the same quarter have and housing Economic seen MRB actions on management XX Development property could court XXXX budgeting restructuring XX options which management seen below broad currently the for is University case prior the their Knoxville work XX/XX San something pandemic center time. process. way at our XXX that transitioned through property pandemic. we manages for performance. else an The bankruptcy part MRB classes on assets. the level of the Maryland has the XXXX XXXX. Apartments of XX% which The Chapter above stands COVID historic pre borrower been The is on of its evaluate the suites quarter, last XX%, to lists that other The resumption the evaluated the was entered the As similar for types. or Johns no that fourth into of saw bankruptcy to with need XX and Live company occupied, we recently Live to Paseo the Corporation's debtor housing is of occupied, has student agreement with of Those amortization forbearance here a Hopkins Houlihan forbearance proton And regard at no two be owner certain third levels either XX% same outright The to centers XXXX, XXX Leasing for have XXXX. runs be in The since bond Johns unit years portfolio slightly of as borrower options position. the fall. will to to student person retained at new State, process. Diego end On Like prior in existing of provision at a existing sale through and the principal Center University, University this developments reversion the of XXXX, of take bankruptcy XXXX the need COVID to therapy to XXXX Hopkins Nebraska with facilities, the or seen valuation today,

year. modest last the of have quarter bond third municipal continued yields performance markets, since fund in the mutual XXXX of Municipal a to for strong bonds. Turning brought widening March inflows their

but net outflows. XXXX, of week a have of with all in far inflows only six $X net single seen billion, weeks So over

three of with XXXX, billion $X the those three weeks outflows the been municipal row. last in than crept year the inflow the of quarter. three sub funds basis at in a to have The MMD Treasury been weeks in However, high its a yield interest There have XX sub of US handful uncertainty AAA in markets the for the negative policy currently third from second And of XX% X.XX%, The the and changes quarter level on XX level a potential towards overall inflation, US roughly the to segment. higher up has quarter. income potential the year had the surrounding over end US XX% is tax impact rates. performance the currently economy, the to of of Muni XX in ratio end muni year markets, three at MMD In at to X.XX%. yield last points is fixed

which an In closed million financing Georgia. loan light another July, terms debt during of for on In a construction commitment new million had our last investment on in $XX third call. on transaction, quarter's $XX quarter, closed construction mentioned in we activity construction we tech I the September, project

MRBs commercial we tech provide Additionally, and Angeles. closed at the affordable reuse for of property to construction adaptive financing end an housing permanent light on to historic $XX million of downtown and the in October, Los of

project the one new California largest forward in a area. nonprofit Long for commitment financing Beach, on providers housing nation's the permanent of to provided also construction We a

conjunction the in segments. lending CAD the August located was financing Val redemption opportunities see with continue Jumbo the net Verde both XXXX, Partnership in In Verde sold. in deconstruction in sale. approximately BUC $X.XX Vantage buck, of We interest and as per Texas of result The our market membership permanent property, of a to recognized income

As fund I quarter's our of committed and mentioned Fair million we full is $XX call, on Antonio a closed In at September, Oaks. San the equity development investment a construction underway. site the acquisition last of in we for of Vantage

opportunities continue We will to be may sponsors where currently look strongest on our strategically traditional of not with available. work capital investment sources to new

Finally, to access to almost the be time we to follow regard equity the of eight September, for the were years. end completed able market with in on the pleased Partnership at offering that the first

term equity Coury, things for over third to one shorter remaining net Vantage believe our we of of the source we opposed equity equity advantage The in this our of corporate our the that, common to in facilities. up Vantage for best discuss to quarter funding will our cost roughly the investments already committed We activity fund the two As debt data XXXX, seen of of I that through on is in to additional see raised Vantage you XXXX. exceeded the and Jesse debt drawing was turn capital. With equity to have have additional can financial the investment as offering, investments. returns the either previous CFO from half available higher activity, common

Jesse Coury

Ken. you, Thank

or for CAD Vantage CAD the revenues of in at for we year. Beneficiary to We $X.XX the basic BUC total short and quarter reported BUC for approximately $X.XX diluted in $X.XX Distribution, year-to-date million diluted Certificate third same per per assets GAAP total BUC income to $X.XX of billion On million. XXXX $X.XX to compared BUC recorded $X.XX a our Net per per a per total period the three the for Such BUC For measured prior compared and portfolio, investment of basis, of of Available comprised BUC basic XXXX, being revenues income third $X.XX, owned compared for of of buck. properties. XX. million as our our September net XXXX. portfolio, reported per we MF assets non classes, primarily second spread and are main the $XX.X for investment and and Cash $XX.X Net our first or $XX.X up Unit

$XXX spread Bond for represent Loans and as and million, XX% of our totaled Our Issuer These of is short, investments GIL, or MRB net our and $XXX XX, total states and California September XX% million. Mortgage MRBs GILs that provide affordable own with of our portfolio MRB Revenue for We financing MRBs approximately properties to Governmental properties based or of related South permanent totaled in at GIL assets. amounts MRBs Carolina We states. three the XX%, of hold outstanding principal, currently XX XX Texas in significant XX% portfolio. across representing on multifamily consists

third million we also and of obligations exempt properties. to in loans from GIL During properties is are $X.X MRBs equivalent of first have during on the that income property to redeemed Ls our governmental believe principal Rosewood with GI share In non typically fund own quarter, we of authorities funded currently instances, recourse multifamily property and GILs commit at four of the to earned advanced. Carolina. with after And that were personal GIL are mortgage and GILs expect recognized nine across the financed a most resulting tandem construction been by the all federal lien tax. related in South MRBs associated premium million real Two MRBs We and two of loan a are that The million tax closed funds interest a a were the low Townhomes a in mortgage property by credit new six and of totaling they multifamily We quarter, on income four and Credit commitment states. commitment affordable of issued quarter. Housing $XX.X on to Florida, functionally million to consisting affordable the property low property principal, construction secured the Apartments the to in housing our in finance GIL contingent $XX in Tax outstanding finance Georgia. third an Pointe South properties a redeemed investments $XX Income third and interest

and funding GIL that related As during $XXX.X of outstanding advanced September drawdown had commitments property on basis million a loan be totaling totaling million funding construction. XX, will $XXX.X commitments we

forbearance forbearance As In with for interest student with contractual deferral associated pandemic. payments above XX% XXX GILs operations recovers affordable principal we housing for we to going the while payments for of and potential of occupied XX, or for property is Apartments MRBs, COVID loans associated needs monitor the the principal properties. date, MRB XXXX the XXXX, a pre Maryland. have in property forbearance effects The Baltimore, requests no of to The Ken we forward. COVID-XX forbearance granted as cn through mentioned and of September and additional property continue levels, multifamily received was property Live consisted which a from of

MRB the for with XX protection, Center in As while we mentioned therapy Provision assessing cancer through treatment the petition Tennessee, bondholders. a center and in options the our a and proton borrower process, Ken senior restructuring December XXXX, bankruptcy of is working sale Chapter are bankruptcy borrower Knoxville, filed other property,

the properties the Moving portfolio, that rate consists as of aggregate the is construction X,XXX on which All Hadow, a XX, carrying of exclusive projects XX of which vantage in at as One Investment reported is market multifamily on represent of to on investments a are over September $XX.X September for it of our Vantage rental investments of value one Vantage of our was XX, basis. consolidated The units. consolidated investments basis. reported million investment

to XX, Colorado. Lisa in of of Texas, had September XX Six under the in $XX.X and one in phase. Of planning the Nebraska, million currently, fund we As in a of either projects projects. projects commitments equity eight or and in five construction and two total complete Tennessee and are six are are across each

As five of with over the the of now end property XX% over completed occupancy occupied. properties of October six the sixth XX% have

due delays On no under been six under to for the construction. or material disruptions COVID-XX currently development, properties there have

income initial our $X our in property been $XX equity This $X.X our And we of investment over investment the investment was mentioned Vantage have the was that recognize is of returned. XXXX aggregate gains contingent in which Upon and gain interest. was redeemed, ninth million $X.X quarter. Ken a sale generated Vantage capital on Bulverde million redeemed. in third and million sold the of redemption, and of Texas investment and has Bulverde As million August

portfolio partially provide a of COVID-XX with the $XX properties Both properties of and college And a Paseo the XX, is is as serving impact obligations of than approximately Both levels. total on State student first properties the University Diego and Diego of classes State XX. students is which in XXX housing, campus housing carrying San universities which significant lower September and operating MF of of of student semester. is suites remote. had XXXX direct as of XX% San mortgage MF as properties XX% Nebraska in for XXXX properties slightly MF on XX/XX higher of value went fully the went two California all Diego pre from a cash and owned beds and million than remote, resumed and MRB Our consisted University the Nebraska levels the operations. property have continue occupied, fall University. half during September on pandemic property meet COVID San person occupied, the pre COVID Both MF to XXXX with net

$XX.X and financing with converted and provides Bankers variable relationships. hedging and at that Of temporary lender and rate provides third such rates XX% with $XX were proceeds acquisition are first investment gross interest is Of least swaps. rates with the we mentioned South hedged investments of XX% million loans. million, against our variable the Barclays Bank over side, a property debt proceeds leverage for interest million source property of secured in acquisitions, associated XXXX the facility June of without MRBs Pointe our leverage secured XX. by diversification as debt an interest a it managing apartments our debt in Townhomes totaled the addition liquidity. or This August to million rising financings the GIL offset interest financing of facilities of the tool of PLC, fixed investments received they September our XXXX, financing previously. alternative of our In financing, source Rosewood October $XXX facility. of loan These of and million million as is have we important by as redemption as repayment Trust extended credit of debt maturity X/X approximately September is of closed of debt, XXXX, approximately our The partially Company the separate instruments to TOB $XXX million and and variable. aggregate to caps financing rates and XX, of an drawdown $XXX the On from of XXXX, need we In investments. use lever on variety This trust In to to line is GILs GIL investment. our Barclays $XXX loan property $XX.X we MRBs, in with facility valuable our funding of quarter for the a lender and for various financings related debt MRB, such

potential and completed quarters. million BUC our September. to equity to expect interest net increases direct to Lastly, in that report in public And on We $XX.X sensitivity financing first our that based assumptions, XX rate in approximately investment assume exposure CAD for offering proceeds Form an fund million deploy and net primarily result on in approximately quarterly is approximately proceeds page point given expenses BUC which capital transaction in shows an per of side, rates immediate various and will the rates. monitor raise decrease pipeline, This of QX coming approximately months. for on in our of interest is The and XX our net interest Vantage sale and our rates the XX we a response commitments do net shows XXX after rate discounts, rates analysis, we changes that investment as rise in basis that scenarios to $X.X impact immediate through million for our a we The included $X.XXX closed was since XXXX. analysis early market of commissions our nothing $X.X income sensitivity income in we of those for month XX-Q. or interest period in in that a interest interest table the interest scenarios there our BUC. sustained These regularly increase

value regularly net $X.XX per per per XXth approximates value BUC which September BUC, of provide of was BUC, our our XX, book June book we $X.XX. net Lastly, as which

was XX our per September premium value of on is to $X.XX market the book a X%. on closing Our price approximately which NASDAQ BUC,

is a book market audience. market of happy that which our as our from was value Ken BUC. the and per premium price now answer closed over XX% yesterday, I are comparison, With $X.XX, to questions closing For


Jason Instructions] JonesTrading. do We Stewart from question [Operator have from a


accelerating nicely, good are commitments afternoon. advances remain Thanks pretty Obviously and pretty strong.

cash of how the the With the cadence to the we at over advantage about next and is What a offering couple quarters should -- think high deployment sale capital relative XQ? level. of


thanks today. and Hey, that couple for Jesse of then his add make have A I'll Jason, I'll thoughts. comments joining there

Governmental in looking going GIL of volume, right transactions our Loans forward. or exactly particularly terms You're at the of Issuer

them As Jesse drawdown We do had XXX% mentioned, of fund these all loans. are construction closing. at not

process the see ramps So then upsize construction TOB sponsors, us in loans projects, as with at come and the upsize our project which from cause funding that. we requests individual more up conjunction the funding to in our

more So given of that closed have that as process up their construction we capital the XXXX, of start and that in we would on books know, draw fact to there. sponsors our nine with to we'll ramp those the first deeper see you and as getting deployed and really I the date, more continues transactions that construction expect June into

also transactions couple activity, nature We new total closed and grand three sizeable that that of over million. the have of almost in origination the we've past months $XXX the are

those with GIL up continued pace And ramp their it's of think in accelerated construction particularly right market. that really I process, to so get going we're as the a and gear into assume see deployment, to


GIL is coming quarters. seeing see you start million expect that a this an I in in QX. for we to QX agree in ramp Ken, And approximately $XX ramp up Jesse, we million to $XX the increase the from see similar to up, quarter-over-quarter, Yes, fundings with are

of financing side, first. to equity the Vantage month deployment under then in our in a process. little a our XX XX side, Whereas construction bit loan second. on on comes side, comes the build construction a timeline, is longer And Vantage capital different so the On

typically, is timeframe. to So from under nine six the closing deployment months equity of shorter frame, the time a in advantage


supply chain share little helpful. the you relative of development think is you could of getting Got It some who And bit some sounds seeing it, it you then chains insight share to issues supply some that's about smooth proper terms could why have that with publicly maybe you're of not products insight. and as place bigger timelines. like others in issues. that's a Maybe projects in to terms as talked in been many hit


Whole I job in part that think fact GCs that their working I a due just with just my refresh Lotus immediately of but the needed. accessing was that for the was for at the suppliers then to underway of warehouse Jason, has an Vantage the just the with was then make a project, needed going that example, to it their Jesse as materials to was actually believe as really project the in we terms project done what that negotiate paid that closing off lumber is available be Texas, that the memory, basis. purchase mean, of one that the bulk did lumber the are projects was an in draw. Vantage site of were got materials I bonded And the stored which guys in sure needed a good team and it on

them supply saw know very pullback that they were the allow are to like chain site to earlier up that the labor, able because management lot there timeframes on were needed participants and in we wasn't sure work available make given as and on like to also that, more their or available construction. materials them through some, that that I pace such have projects crews the to think there construction from of other and were high you there the this think, open framing guys of accelerate I it things that there when Vantage commodities smart get process have that So year manage the crews of market freed a prices, things underway. done, they the other

the and job hearing favor. worked what that of candidly, little I of think, great advantage uncertainty a our perspective, that to of has hear you're participants. from taking our market So think a terms I from turmoil actually done that. of But quite I of saying you're other what And kind in team Vantage bit has


are speak to you Sunbelt. Vantage themselves. if sort strong the mean, I mean, way across I quite entire great. it's up obviously multifamily think pull And the the of obviously, rents segment, then on results I

where land overall your just I think strategy. would about other partners pull segment up have Vantage if you consider thinking the view long-term development could think two maybe you it But there fits goes, you that of you parcels. and how and the share and are into


successful been investments those that to the we've done think since I the XXXX with we've with was in of the kinds group very investments. allow Partnership Vantage amended

I continue keep that we've to think we've that I good got same the starting deals perspective, to that the now the percentage potentially of in looking underway, seen, asset pipeline a and and a Partnership's the strategy, from lease and we so assets with good asset of to, terms or be got it even pleased little that an of allocation in projects present very bit from grow as opportunities are are we've we have the class XX the performance invested themselves. the seen projects rent that think that strong growth the leasing up perspective, we've

will has be that But like it's of Some are market higher the earlier in like there we're markets that a large, year, I are Colorado that land think higher that an capital shown this there asset make that costs looking track can class we our Loveland I there. that where into investment utility record the the further costs, and doing at activity by and successful an we with. things and deployment strategy made we factor think

might terms Vantage possibility relationships a to particular evaluate going and similar the with a also give to and we're of their effect opportunities strategies. developing of team both us for their continue with to other in territory diversification work of bit home markets so end look sponsors And the that


back I'll on no call Rogozinski, over question Ken turn a queue. there further now And the to

Ken Rogozinski

us for joining talk to We'll your you, today. We appreciate and next ATAX. quarter. of interest Thank everybody support you


Thank This concludes today's participating. for conference you call.

now disconnect. may You