PROXY STATEMENT
PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
AFL-CIO HOUSING INVESTMENT TRUST
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(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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November 28, 2003
TO PARTICIPANTS, AFL-CIO HOUSING INVESTMENT TRUST
Enclosed is the Notice of a Special Meeting of Participants and a
Proxy Statement describing proposed amendments to the Declaration
of Trust and other indicated matters that are expected to come up
at the meeting.
Also enclosed is a proxy card for each Participant noting the
number of Units held by that Participant and the exact name in
which those Units are registered. A Participant that does not
wish to send a representative to the meeting should vote its
Units by mail or facsimile, as described herein, as soon as
possible.
Sincerely,
Stephen Coyle
Chief Executive Officer
PLEASE VOTE WITHIN FIVE DAYS OF RECEIPT
SC/spt
opeiu #2, afl-cio
Enclosures
AFL-CIO HOUSING INVESTMENT TRUST
PROXY
Special Meeting of Participants
The undersigned hereby appoints Michael M. Arnold and Helen R. Kanovsky
and each of them with power to act without the other and with full power of
substitution, as proxies for and on behalf of the undersigned, to vote all
Units of Participation which the undersigned is entitled to vote at the
Special Meeting of Participants to be held December 19, 2003 and all
adjournments thereof, with all the powers that the undersigned would possess
if personally present and particularly (but without limiting the generality of
the foregoing) to vote and act as follows:
(I) To approve an amendment to Section 3.3(c) of the Declaration of
Trust, authorizing investment in securities that are secured by single family
or multifamily mortgage securities and/or single family or multifamily
mortgage loans and that are rated at the highest rating by Standard & Poor's,
Moody's Investor Service, Fitch Ratings, or a comparable nationally recognized
statistical rating agency.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(II) To approve an amendment to the Declaration of Trust to modify
Section 3.3(d)(ii) respecting direct loans for low income housing projects to
increase the permitted loan to value ratio from 75% to 80%, subject to
specified requirements, including a requirement to obtain mortgage insurance
or another form of guaranty that covers all losses down to a 60% loan to value
level, and to add a new Section 3.3(d)(iii) to permit the Trust to make direct
loans for market rate housing projects, subject to specified requirements.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(III) To approve an amendment to Section 3.3(h) of the Declaration of
Trust to increase from 10% to 15% the percentage of Trust assets that may be
invested in U.S. Treasury and Government-Sponsored Enterprise securities and
eliminate the restriction requiring scheduled maturity dates of 10 years or
less.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(IV) And upon such other matters as may properly come before the
meeting.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
The Trustees recommend a vote FOR the above items. ANY PROXY
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NOT MARKED OTHERWISE WILL BE TREATED AS A VOTE FOR THE ITEMS.
The Units of Participation represented hereby will be voted
in accordance with instructions contained in this Proxy.
The undersigned hereby ratifies and confirms all that said
proxies or their substitutes or any of them may lawfully do by
virtue hereof. The undersigned hereby acknowledges receipt of
the Notice of Special Meeting of Participants dated November 28,
2003 and the Proxy Statement dated November 28, 2003.
Please sign your name and indicate your capacity as attorney,
trustee or official of a Participant.
Dated: , 2003
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Participant ID:
Participant Name:
Number of Units:
By:
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(Signature)
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(Name - please print)
Title: --------------------------------------
(please print)
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
TRUST.
IMPORTANT: THIS PROXY MAY BE VOTED IN ANY OF TWO (2) WAYS:
BY MAIL: PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY IN
THE ENCLOSED SELF-ADDRESSED, STAMPED ENVELOPE.
BY FACSIMILE: PLEASE SIGN, DATE AND PROMPTLY FAX THIS PROXY TO
(202) 331-8190.
AFL-CIO HOUSING INVESTMENT TRUST
NOTICE OF A SPECIAL MEETING OF PARTICIPANTS
To Participants, AFL-CIO Housing Investment Trust:
Notice is hereby given that a Special Meeting of
Participants (the "Meeting") of the American Federation of Labor
and Congress of Industrial Organizations Housing Investment Trust
(the "Trust"), a District of Columbia common law trust, will be
held at the offices of the Trust, 1717 K Street, N.W., Suite 707,
Washington, D.C., 20036 on December 19, 2003 at 2:00 p.m. for the
following purposes:
1. To approve an amendment to Section 3.3(c) of the Declaration
of Trust, authorizing investment in securities that are secured
by single family or multifamily mortgage securities and/or single
family or multifamily mortgage loans and that are rated at the
highest rating by Standard & Poor's, Moody's Investor Service,
Fitch Ratings, or a comparable nationally recognized statistical
rating agency;
2. To approve an amendment to the Declaration of Trust to
modify Section 3.3(d)(ii) respecting direct loans for low income
housing projects to increase the permitted loan to value ratio
from 75% to 80%, subject to specified requirements, including a
requirement to obtain mortgage insurance or another form of
guaranty that covers all losses down to a 60% loan to value
level, and add a new Section 3.3(d)(iii) to permit the Trust to
make direct loans for market rate housing projects, subject to
specified requirements;
3. To approve an amendment to Section 3.3(h) of the Declaration
of Trust to increase from 10% to 15% the percentage of Trust
assets that may be invested in U.S. Treasury and Government-
Sponsored Enterprise securities and eliminate the restriction
requiring scheduled maturity dates of 10 years or less; and
4. To transact such other business as may properly come before
the Meeting or any adjournment or adjournments thereof.
The close of business on November 18, 2003 has been fixed as
the record date for the determination of Participants entitled to
notice of and to vote at the Meeting and any adjournment(s)
thereof. Accordingly, only Participants of record as of the
close of business on that date are entitled to notice of and to
vote at the Meeting or at any such adjournment.
By Order of the Board of Trustees
Stephen Coyle
Chief Executive Officer
Dated: November 28, 2003
AFL-CIO HOUSING INVESTMENT TRUST
PROXY STATEMENT
November 28, 2003
General Matters
This Proxy Statement is being sent on November 28, 2003 in
connection with the solicitation of proxies for use at a Special
Meeting of Participants (the "Meeting") of the American
Federation of Labor and Congress of Industrial Organizations
Housing Investment Trust (the "Trust") to be held at the offices
of the Trust, 1717 K Street, N.W., Suite 707, Washington, D.C.
20036, on December 19, 2003, beginning at 2:00 p.m. and at any
adjournment(s) thereof.
The Trust is a single, self-managed fund. Apart from a
portion of its short-term investment portfolio that is managed by
Wellington Management Company, LLP, the Trust has no investment
adviser, principal underwriter or Administrator. Wellington
Management's principal offices are located at 75 State Street,
Boston, Massachusetts 02109.
A copy of the Trust's annual report for the year ended
December 31, 2002, together with financial statements for the
fiscal year ended December 31, 2002, and the Trust's semi-annual
report for the six months ended June 30, 2003, were previously
mailed to each Participant entitled to vote at the Meeting. The
Trust will furnish, without charge, a copy of the annual report
for 2002 and the semi-annual report for the six months ended June
30, 2003 to any Participant that requests one. Requests for
reports should be made by placing a collect call to Stephanie
Turman, Investor Relations Coordinator, AFL-CIO Housing
Investment Trust at (202) 331-8055. Written requests may be
directed to Michael Arnold, Senior Executive Vice President -
Marketing, Investor and Labor Relations, AFL-CIO Housing
Investment Trust, 1717 K Street, N.W., Suite 707, Washington,
D.C. 20036.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE SPECIAL MEETING?
At the Trust's Special Meeting, Participants will act upon
the matters outlined in the accompanying Notice of Meeting,
including whether to: (a) approve an amendment to the
Declaration of Trust to permit the Trust to purchase certain
mortgage related securities that are rated at the highest rating
by a nationally recognized statistical rating agency such as
Standard & Poor's, Moody's Investor Service or Fitch Ratings; (b)
approve an amendment to the Declaration of Trust respecting
direct loans for low income housing projects, to increase the
permitted loan to value ratio from 75% to 80%, subject to
specified requirements, and to add direct lending authority for
market rate housing projects, subject to specified requirements;
(c) approve an amendment to the Declaration of Trust to increase
the percentage of Trust assets which may be invested in U.S.
Treasury and Government-Sponsored Enterprise securities from 10%
to 15%, and eliminate the restriction requiring scheduled
maturity dates of 10 years or less; and (d) transact such other
business as may properly come before the Meeting or any
adjournment or adjournments thereof. In addition, the Trust's
management will respond to questions from Participants.
WHO IS ENTITLED TO VOTE?
The close of business on November 18, 2003 is the record
date for the determination of Participants entitled to notice of
and to vote at the Meeting and any adjournment(s) thereof (the
"Record Date"). As of the Record Date, there were 3,141,422.5789
Units of Participation of the Trust outstanding, each Unit being
entitled to one vote. No shares of any other class of securities
were outstanding as of that date.
Only Participants of record as of the close of business on
the Record Date will be entitled to vote at the Meeting.
WHO CAN ATTEND THE MEETING?
All Participants as of the Record Date, or their duly appointed proxies,
may attend the Meeting.
WHAT CONSTITUTES A QUORUM?
A quorum for the Meeting is the presence in person or by proxy of
Participants holding a majority of Units outstanding at the close of business
on the Record Date. As of the Record Date 3,141,422.5789 Units of
Participation of the Trust were outstanding. Proxies received but marked as
abstentions will be included in the calculation of the number of Units
considered to be present at the Meeting.
HOW DO I VOTE?
By Mail: If the proxy card that is enclosed with this Proxy Statement is
properly executed and returned, the Units of Participation it represents will
be voted at the Meeting in accordance with the instructions noted thereon. If
no direction is indicated, the proxy card will be voted in accordance with the
Trustees' recommendations set forth thereon.
By Facsimile: If the proxy card that is enclosed with this Proxy
Statement is properly executed and returned via facsimile to (202) 331-8190,
the Units of Participation it represents will be voted at the Meeting in
accordance with the instructions noted thereon. If no direction is indicated,
the proxy card will be voted in accordance with the Trustees' recommendations
set forth thereon.
In Person: Attending the Meeting and voting your Units.
CAN I CHANGE MY VOTE AFTER GIVING A PROXY?
Yes. Any Participant giving a Proxy may revoke it at any time before it
is exercised by giving written notice to the Trust bearing a date later than
the date of the Proxy, by submission of a later dated Proxy, or by voting in
person at the Meeting, which any Participant may do whether or not such
Participant has previously given a Proxy.
WHAT ARE THE BOARD OF TRUSTEES' RECOMMENDATIONS?
Unless you give other instructions when you vote, the persons named as
proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Trustees. The Board's recommendation is set
forth together with the description of each item in this proxy statement. In
summary, the Board recommends a vote:
- To approve an amendment to Section 3.3(c) of the Declaration
of Trust, authorizing investment in securities that are secured
by single family or multifamily mortgage securities and/or single
family or multifamily mortgage loans and that are rated at the
highest rating by Standard & Poor's, Moody's Investor Service,
Fitch Ratings, or a comparable nationally recognized statistical
rating agency (see page 3);
- To approve an amendment to the Declaration of Trust to
modify Section 3.3(d)(ii) respecting direct loans for low income
housing projects to increase the permitted loan to value ratio
from 75% to 80%, subject to specified requirements, including a
requirement to obtain mortgage insurance or another form of
guaranty that covers all losses down to a 60% loan to value
level, and add a new Section 3.3(d)(iii) to permit the Trust to
make direct loans for market rate housing projects, subject to
specified requirements (see pages 3-4); and
- To approve an amendment to Section 3.3(h) of the Declaration
of Trust that would increase from 10% to 15% the percentage of
Trust assets that may be invested in U.S. Treasury and Government-
Sponsored Enterprise securities and eliminate the restriction
requiring scheduled maturity dates of 10 years or less (see page
4-5).
With respect to any other matter that properly comes before the Meeting
or any adjournment or adjournments thereof, the proxy holders will vote as
recommended by the Board of Trustees or, if no recommendation is given, in
their own discretion.
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WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
As to Proposals I, II, and III, the vote required for approval will be an
affirmative vote of a majority of the Units represented in person or by proxy
at the Meeting. Each Unit is entitled to one vote. Abstentions will not be
included in the calculation of the number of Units voted affirmatively for a
proposal.
WHO IS MAKING THE SOLICITATION ON BEHALF OF THE TRUST?
The Proxy is being solicited by the Board of Trustees of the Trust
through the mail. The cost of solicitation will be paid by the Trust.
Further solicitation of proxies may be made by telephone or oral communication
with some Participants following the original solicitation. Any such further
solicitation will be made by Trustees or officers of the Trust who will not be
compensated therefor. The date on which proxy materials were first mailed to
Participants was November 28, 2003.
PROPOSED AMENDMENTS TO DECLARATION OF TRUST
PROPOSAL I: TO APPROVE AN AMENDMENT TO SECTION 3.3(c) OF THE DECLARATION OF
TRUST, AUTHORIZING INVESTMENT IN SECURITIES THAT ARE SECURED BY
SINGLE FAMILY OR MULTIFAMILY MORTGAGE SECURITIES AND/OR SINGLE
FAMILY OR MULTIFAMILY MORTGAGE LOANS AND THAT ARE RATED AT
THE HIGHEST RATING BY STANDARD & POOR'S, MOODY'S INVESTOR
SERVICE, FITCH RATINGS, OR A COMPARABLE NATIONALLY RECOGNIZED
STATISTICAL RATING AGENCY.
This amendment would modify Section 3.3(c) of the Declaration of Trust to
provide the Trust with the authority to invest in certain mortgage related
securities that are rated at the highest rating by a nationally recognized
statistical rating agency, such as Standard & Poor's, Moody's Investor
Service or Fitch Ratings. The underwriting standards and credit enhancement
required to obtain the specified rating for such securities will ensure that
the Trust receives a high level of security.
If a proxy in the enclosed form is received from a Participant, the Units
of Participation represented by such Proxy will be voted for Proposal I set
forth above (unless otherwise indicated on the Proxy).
THE BOARD OF TRUSTEES RECOMMENDS THAT PARTICIPANTS VOTE "FOR" THE
APPROVAL OF AN AMENDMENT TO THE DECLARATION OF TRUST TO PERMIT
THE TRUST TO PURCHASE CERTAIN MORTGAGE RELATED SECURITIES THAT
ARE RATED AT THE HIGHEST RATING BY A NATIONALLY RECOGNIZED
STATISTICAL RATING AGENCY SUCH AS STANDARD & POOR'S, MOODY'S
INVESTOR SERVICE OR FITCH RATINGS.
PROPOSAL II: TO APPROVE AN AMENDMENT TO THE DECLARATION OF TRUST RESPECTING
DIRECT LOANS FOR LOW INCOME HOUSING PROJECTS TO INCREASE THE
PERMITTED LOAN TO VALUE RATIO FROM 75% TO 80%, SUBJECT TO
SPECIFIED REQUIREMENTS, AND TO PERMIT THE TRUST TO MAKE DIRECT
LOANS FOR MARKET RATE HOUSING PROJECTS, SUBJECT TO SPECIFIED
REQUIREMENTS.
This proposed amendment would modify Section 3.3(d)(ii) of the
Declaration of Trust respecting direct loans for low income housing projects
to increase slightly the permitted loan to value ratio, subject to specified
requirements, and add a new Section 3.3(d)(iii) to permit the Trust to make
direct loans for market rate housing projects, subject to specified
requirements.
This modification will increase the permitted loan to value ratio from
75% to 80% with respect to direct loans for low income housing projects. Such
an increase will permit the Trust to offer financing which is more attractive
to borrowers, who can obtain 80% loan to value loans from other lenders,
without increasing the risk to the Trust. All other requirements for
these direct loans will remain unchanged, including the requirement that
mortgage insurance or another form of guaranty that covers all losses down to
a 60% loan to value level is obtained from an entity rated A or better by
Standard & Poor's (or a comparable rating by another nationally recognized
rating agency).
3
The new Section 3.3(d)(iii) will permit the Trust to make direct loans
for market rate projects on terms consistent with Section 3.3(d)(ii), except
that a financial contribution from a state or local government would not be
required, the developer's demonstrated track record must be in market rate
projects rather than low income housing projects and the required underwritten
debt service coverage would be 1.25%, rather than 1.15%.
The modifications retain the current limitation on the permitted
percentage of direct loans (i.e., the total may not exceed 4% of the value of
Trust assets), whether the loans are made pursuant to 3.3(d)(ii) or the new
3.3(d)(iii).
If a proxy in the enclosed form is received from a Participant, the Units
of Participation represented by such Proxy will be voted for Proposal II set
forth above (unless otherwise indicated on the Proxy).
THE BOARD OF TRUSTEES RECOMMENDS THAT PARTICIPANTS VOTE "FOR" THE
APPROVAL OF AN AMENDMENT TO THE DECLARATION OF TRUST TO MODIFY
THE TRUST'S DIRECT LENDING AUTHORITY RESPECTING LOW INCOME
HOUSING PROJECTS AND TO ADD DIRECT LENDING AUTHORITY RESPECTING
MARKET RATE HOUSING PROJECTS.
PROPOSAL III: TO APPROVE AN AMENDMENT TO THE DECLARATION OF TRUST TO
INCREASE THE PERCENTAGE OF TRUST ASSETS WHICH MAY BE INVESTED
IN U.S. TREASURY AND GOVERNMENT-SPONSORED ENTERPRISE
SECURITIES FROM 10% TO 15% AND ELIMINATE THE RESTRICTION
REQUIRING SCHEDULED MATURITY DATES OF 10 YEARS OR LESS.
This proposed amendment would modify Section 3.3(h) of the Declaration of
Trust to increase the percentage of the Trust's assets which may be invested
in Treasury or Government-Sponsored Enterprise securities from 10% to 15% and
eliminate the restriction requiring scheduled maturity dates of 10 years or
less.
The market value of many of the Trust's assets is typically determined by
comparing the difference or "spread" between the yield on the 10-year Treasury
bond and the yield required by investors for each type of asset. Treasury
bonds are deemed to be credit-risk-free investments and have no spread risk.
The spread above the Treasury bond is primarily intended to compensate
investors for a perceived credit risk that is greater than the Treasury bond.
Under different market conditions, these spreads will narrow or widen for
different asset classes. When the spread for a type of asset narrows, those
assets are worth more and when the spread for a type of asset widens, those
assets are worth less. Spread risk is the risk that the value of the
Trust's assets may be adversely affected by changes in the spread for those
assets.
Under most interest rate conditions, the Trust does not anticipate
utilizing the full 15% authority to invest in Treasury and
Government-Sponsored Enterprise obligations. Over the past two years, the
average level of investments in this category has been less than 5%. Under
certain market conditions, however, such as those of the past six months, this
higher ceiling would facilitate a more flexible investment profile by reducing
the portion of the Trust's portfolio exposed to spread risk. Currently 95% of
the Trust's portfolio is exposed to spread risk, as compared to 78% for the
Trust's benchmark index, the Lehman Brothers Aggregate Bond Index. Investing
in a greater percentage of Government-Sponsored Enterprise debt obligations in
appropriate market conditions would also help the Trust more closely mirror
investments in the Lehman Brothers Aggregate Bond Index, which had 12% of its
assets in Government-Sponsored Enterprise debt obligations as of October 31,
2003.
The ability to invest in longer maturities would give the Trust greater
flexibility to manage more effectively, efficiently and cheaply its duration.
If a proxy in the enclosed form is received from a Participant, the Units
of Participation represented by such Proxy will be voted for Proposal III set
forth above (unless otherwise indicated on the Proxy).
THE BOARD OF TRUSTEES RECOMMENDS THAT PARTICIPANTS VOTE "FOR" THE
APPROVAL OF AN AMENDMENT TO THE DECLARATION OF TRUST TO INCREASE
THE PERCENTAGE OF TRUST ASSETS WHICH MAY BE INVESTED IN U.S.
TREASURY AND GOVERNMENT-SPONSORED ENTERPRISE SECURITIES FROM 10%
TO 15% AND ELIMINATE THE RESTRICTION REQUIRING SCHEDULED MATURITY
DATES OF 10 YEARS OR LESS.
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PROPOSALS FOR 2004 ANNUAL MEETING OF PARTICIPANTS
Participants who wish to make a proposal to be included in the Trust's
proxy statement and form of proxy for the Trust's 2004 annual meeting of
Participants (expected to be held in May 2004) must cause such proposal to be
received by the trust at its Principal office not later than December 15,
2003.
OTHER MATTERS
At the date of this Proxy Statement, the Trustees know of no other
matters that may come before the Meeting. If any other matter properly comes
before the Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the Units represented by such Proxy in accordance with
their best judgment.
Participants who are unable to attend the Meeting in person are urged to
forward their Proxies without delay. A prompt response will be appreciated.
By Order of the Board of Trustees
STEPHEN COYLE
Chief Executive Officer
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