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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
MAY 12, 1998
Date of Report
(Date of earliest event reported)
AMRESCO CAPITAL TRUST
(Exact name of registrant as specified in charter)
TEXAS 1-14029 75-2744858
(State or other jurisdiction (Commission (IRS Employer
of incorporation or organization) File Number) Identification No.)
700 NORTH PEARL STREET
SUITE 2400, LB 342
DALLAS, TEXAS 75201
(Address of principal executive offices)
(214) 953-7700
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 12, 1998, AMRESCO Capital Trust (the "Company")
acquired from AMRESCO Funding Corporation ("AFC") an affiliate of AMREIT
Managers, L.P., the manager of the Company, a $6 million nonrecourse loan
secured by a second lien on a 956,114 (approximate) square foot mixed-use
development located in north-central Columbus, Ohio. The loan was originated
by AFC on February 20, 1998 and was purchased by the Company from AFC for a
purchase price of $1,014.19, equal to the outstanding principal balance of the
loan, plus accrued interest. In addition, AFC paid to the Company $294,000,
equal to the unamortized portion of the loan origination fee.
The loan bears interest at 15% per annum. Payments of
interest only are due monthly commencing April 1, 1998, until the loan is paid
in full. All principal, and all remaining accrued and unpaid interest on the
loan, are due on March 31, 2001. Certain of the borrower's excess cash flow is
required to be applied toward payments of principal and interest on the loan.
In addition to a second lien on the mortgaged real property, the loan is also
secured by a pledge of the partnership interests of each partner in the
borrower and limited guaranties of certain recourse carve-outs by the three
owners of the general partner of the borrower.
The purchase of this loan was contemplated by the Company at
the time of its initial public offering of Common Shares and the terms of the
loan are more fully described in the Company's Registration Statement on Form
S-11 (such loan being referred to therein as "Loan One").
On May 12, 1998, the Company also acquired from AFC a $14.7
million nonrecourse loan for the construction of an 11-story multi-tenant
office building containing 300,887 (approximate) net rentable square feet and
an adjoining five level parking structure to be located in a suburb of Dallas,
Texas. The loan was originated by AFC on March 30, 1998 and was purchased by
the Company from AFC on March 30, 1998 for a purchase price of $5,860,789.87,
equal to the outstanding principal balance of the loan, plus accrued interest.
In addition, AFC paid to the Company $134,671.70, equal to the unamortized
portion of the loan origination fee.
The loan bears interest at an accrual rate of 12% per annum.
Payments of interest only are due and payable monthly at a pay rate of 10% per
annum. A portion of excess cash flow will be applied to payment of accrued and
unpaid interest until the lender has received a 12% return. Any remaining
operating cash flow will be applied to the principal balance of the loan and
any excess may be retained by the borrower. In addition, the loan provides
that the Company will receive 100% of any appreciation in the value of the
mortgaged real property until the Company has achieved a 15% per annum return.
After the borrower has received a 15% return on its equity, then the Company is
entitled to a 30% interest in the appreciation in value of the project until it
achieves a 20% per annum return on its investment and, finally, the Company
will then be entitled to a 20% interest in any appreciation in the value of the
project, with a maximum return of 25% per annum. The to-be-built project
securing the loan is not subject to any option or contract to sell. All
principal and accrued and unpaid interest, including any shared appreciation
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contingent interest, will be due and payable on March 30, 2001. The borrower
has two extension options of one year each, subject to the satisfaction of
certain conditions, including reaching certain leasing parameters and the
payment of a 1% extension fee. The developer has provided a completion
guaranty and a limited guaranty of certain recourse carve-outs.
The purchase of this loan was contemplated by the Company at
the time of its initial public offering of its Common Shares and the terms of
such loan are more fully described in the Company's Registration Statement on
Form S- 11 (such loan being referred to therein as "Loan Four").
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits
The following exhibits are filed as part of this report on Form 8-K:
3.1 First Amendment to Amended and Restated Declaration of Trust
3.2 Second Amendment to Amended and Restated Declaration of Trust
10.1 Sale and Assignment Agreement by and between AMRESCO
Funding Corporation, AMRESCO Capital Trust and AMREIT I, Inc.
effective as of May 12, 1998
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report on Form 8-K to be signed on its
behalf by the undersigned thereunto duly authorized.
AMRESCO Capital Trust
Date: May 12, 1998 By: /s/ MARK D. GIBSON
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Name: Mark D. Gibson
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Title: President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit
Number Description
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3.1 First Amendment to Amended and Restated Declaration of Trust
3.2 Second Amendment to Amended and Restated Declaration of Trust
10.1 Sale and Assignment Agreement by and between AMRESCO
Funding Corporation, AMRESCO Capital Trust and AMREIT I, Inc.
effective as of May 12, 1998