[WINTHROP WEINSTINE LOGO]
March 25, 2009 Karen V. Bertulli
(612) 604-6604
kbertulli@winthrop.com
VIA EDGAR (W/OUT ENCLOSURES) AND FEDERAL EXPRESS
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Securities and Exchange Commission
100 F Street, N.E.
Mail Stop 4561
Washington, DC 20549
Attention: Mr. Tom Kluck
RE: AMERICAN CHURCH MORTGAGE COMPANY
AMENDMENT NO. 2 TO REGISTRATION STATEMENT ON FORM S-11
FILED MARCH 9, 2009
FILE NO. 333-154831
Ladies and Gentlemen:
On behalf of American Church Mortgage Company (the "Company"), a Minnesota
corporation, we are responding to the comments presented in the letter from Mr.
Tom Kluck dated March 20, 2009. For the Staff's convenience, our Response is
preceded by the related Staff Comment. In addition, and for ease of reference,
we have included with the mailed, hardcopy of the letter, 4 blacklined copies of
Amendment No. 3 filed today, marked to show the changes to Amendment No. 2 to
the Registration Statement on Form S-11 filed March 9, 2009.
GENERAL
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COMMENT 1. PLEASE TELL US HOW YOU CONSIDERED RULE 8-08(B)(2) OF REGULATION
S-X IN DETERMINING THAT YOU DO NOT NEED TO PROVIDE UPDATED
AUDITED FINANCIAL STATEMENTS OF THE MOST RECENT FISCAL YEAR ENDED
DECEMBER 31, 2008.
RESPONSE 1. The Company will have net income for the fiscal year ended
December 31, 2008 as provided by Rule 8-08(b)(2) of Regulation
S-X.
March 25, 2009
Securities and Exchange Commission
Page 2 of 3
FINANCIAL STATEMENTS AND NOTES
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PERIOD ENDED SEPTEMBER 30 2008
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CONDENSED STATEMENTS OF OPERATIONS, PAGE F-19
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COMMENT 2. IN RESPONSE TO COMMENT 4 IN OUR LETTER DATED FEBRUARY 13, 2009,
WE NOTE YOU HAVE INCLUDED CAPITAL GAINS REALIZED AS A COMPONENT
OF NET INTEREST INCOME. IN FUTURE FILINGS, PLEASE REVISE TO
PRESENT THIS AMOUNT BELOW NET INTEREST INCOME AS A COMPONENT OF
OTHER INCOME.
RESPONSE 2. The Company will revise future filings to include capital gains
with other income rather than as a component of net interest
income.
COMMENT 3. FURTHER TO OUR PREVIOUS COMMENT, GIVEN THE MATERIAL IMPACT TO
OPERATING INCOME RESULTING FROM THE EXCLUSION OF INTEREST EXPENSE
IN PREVIOUS FILINGS, PLEASE TELL US HOW YOU COMPLIED WITH THE
REQUIREMENTS TO FILE AN ITEM 4.02 8-K. IN ADDITION, THE FINANCIAL
STATEMENTS FILED IN YOUR FORM S-11 SHOULD BE CLEARLY LABELED AS
RESTATED.
RESPONSE 3. The Company has filed an Item 4.02 Form 8-K related to the change
in operating income. In addition, the Company has labeled the
financial statements as restated in Amendment No. 3 to Form S-11,
filed today.
NOTE 2 -- FAIR VALUE MEASUREMENT, PAGES F-23 -- F-24
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COMMENT 4. WE HAVE REVIEWED YOUR RESPONSE TO COMMENT 6 IN OUR LETTER DATED
FEBRUARY 13, 2009 AND NOTE YOUR INTENTION TO CATEGORIZE YOUR BOND
PORTFOLIO AS LEVEL 2 IN THE FAIR VALUE HIERARCHY ON A GOING
FORWARD BASIS. PLEASE EXPAND UPON YOUR BASIS FOR THIS
RECLASSIFICATION. IN THIS REGARD, WE NOTE THAT YOU ARE USING
VALUES FOR SIMILAR ASSETS IN INACTIVE MARKETS WITH A FURTHER
ADJUSTMENT FOR YOUR CALLABILITY PROVISION, WHICH MAY BE
SIGNIFICANT TO YOUR FAIR VALUE MEASUREMENT. PLEASE TELL US HOW
YOU CONSIDERED PARAGRAPH 29 OF SFAS 157 IN DETERMINING THAT THESE
BONDS SHOULD BE CATEGORIZED AS LEVEL 2 INSTEAD OF LEVEL 3 IN THE
FAIR VALUE HIERARCHY.
RESPONSE 4. The Company's bond portfolio is recorded at fair value based on
similar assets in inactive markets and discounted cash flow
methodologies. In determining the comparability of similar
assets, the Company considers the contractual terms of the bonds.
The bonds that the Company owns as well as the bonds that the
Company compares against are not rated by an established credit
rating agency. The Company's internal credit rating and process
for selecting comparable bonds are unobservable inputs. These two
factors are
March 25, 2009
Securities and Exchange Commission
Page 3 of 3
unobservable and are a part of the Company's initial assessment
in measuring its bonds and classifying them as level 3 in the
valuation hierarchy. In addition, the bonds that do trade are not
trading above par. These factors will be included in the
Company's future filings to ensure that the disclosures are
consistent with the treatment.
PART II- INFORMATION NOT REQUIRED IN PROSPECTUS, PAGE II-1
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INDEX TO EXHIBITS
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EXHIBIT 8 -- TAX OPINION
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COMMENT 5. WE NOTE YOUR RESPONSE TO COMMENT 9 IN OUR LETTER DATED FEBRUARY
13, 2009. WE REFER YOU TO THE THIRD TO LAST PARAGRAPH OF THE TAX
OPINION. PLEASE ADVISE COUNSEL THAT IT IS NOT APPROPRIATE TO
DISCLAIM RESPONSIBILITY IN ANY MANNER THAT STATES OR IMPLIES THAT
INVESTORS ARE NOT ENTITLED TO RELY ON THE OPINION, OR TO PLACE
LIMITATIONS ON WHOM MAY RELY ON THE OPINION. PLEASE ADVISE
COUNSEL TO REVISE THE TAX OPINION ACCORDINGLY.
Response 5. Further to Comment 5, we have included a revised tax opinion.
Please see Exhibit 8 to Amendment No. 3.
If you have any questions in connection with the filing, please contact the
undersigned at (612) 604-6604.
Very truly yours,
WINTHROP & WEINSTINE, P.A.
/s/ Karen V. Bertulli
Karen V. Bertulli
cc: Philip J. Myers (American Church Mortgage Company)