OMAHA, NEB. — NorthMarq Capial has arranged a $95.81 million tax-exempt bond securitization for a bond portfolio owned by America First Tax Exempt Investors (Nasdaq: ATAX). The deal was arranged through Freddie Mac's Tax-Exempt Bond Securitization (TEBS) program.

The portfolio is secured by 15 multifamily properties totaling 2,500 units. The properties are located in Florida, Illinois, Iowa, Minnesota, South Carolina and Texas.

In this complex transaction, ATAX wished to lever its bond portfolio. It deposited the bonds into a trust and, in exchange, was loaned the $95.8 million. The company received a very favorable interest rate of 2.15 percent and also purchased an interest rate cap of 4.9 percent.

“Right now, it's a tremendous time to execute a TEBS transaction. Rates are amazing,” says John Reed, a vice president with the Omaha office of NorthMarq and the person who arranged the deal.

Half of the proceeds will be used to pay bank a loan with Bank of America that was set to come to term at the end of the year. The other half of the proceeds will be used by ATAX to invest in new bonds.

“The availability of a program like TEBS enables tax-exempt bond managers to lock in long-term, fixed-rate leverage for their bond funds, which creates tremendous liquidity for them to go out and do new bond deals,” Reed says. “That is beneficial to property owners, because there are groups like ATAX that are going to go out and make new loans to the multifamily industry.”

— Coleman Wood

Content Partners
‣ Arbor Realty Trust
‣ Bohler
‣ Lee & Associates
‣ Lument
‣ NAI Global
‣ Northmarq
‣ Pavlov Media
‣ Walker & Dunlop

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