MMAC - Earnings call transcript Q2 2019 | MMA Capital Holdings Inc

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Operator

Good evening, and welcome to the MMA Capital Holdings Second Quarter 2019 Financial Results and Business Update Conference Call. [Operator Instructions]. Please note, this event is being recorded.

I would like to now turn the conference over to Michael Falcone. Please go ahead.

Michael Falcone

Operator. you, Thank and everyone, Good welcome. afternoon, Sophocles. With me our and are Megan Bjarnason, call Financial the Senior Officer; President, Officer; today Chief Operating Gary Dave Chief on Mentesana, Vice our

I and For MMA Second will which our business Capital will available of Holdings The be to Quarter overall take all Dave, update. is our call Gary call we deliver prepared today provide remarks, today, an our after questions. purpose results to financial and to review

with filed updated was report SEC available this our an quarterly Our and Friday, the investor on past is presentation website.

to With record strong from respect to origination second quarter. volumes quarter-over-quarter basis, operations, we the a as on from continue during solar in income the second driven, XX% quarter see investments in by our part, increased investments such returns large

further termination bond all runoff and XXXX our with the of to remainder investment in As we course. attractive bond-related disposing believe portfolio we for process during the continued us demand due agreements at investments, December bond-related remaining fund one quarter, very unleveraged of Also redemption in included outstanding bond leaving swap that capital total no The of our the debt. and investments are projects infrastructure a and began are renewable strong. strategy discuss, the unleveraged in we Gary dispose return on of will of energy portfolio what anticipate mode, this small of risk-adjusted remains returns to executing

Capital and income believe recycling in solar our will an deleveraging that dispositions structure balance statements Gary continue returns bond-related our generate As the equity opportunity investments and investments investors, We in this the investment will investments, discuss. significant will and generated be business March creating in the The changes liquidity that from Energy redeployed comparative better the higher reflected discussed financial potentially our we fueling of the of redeploying sheet way while May in renewable increases with in to calls to impacts comprehensive overall and into on energy it. utilize that portfolio.

and from partnerships cap. income in the Ventures, as income and periods in cap earlier expense respect June an May equity, periods $X.X subject X% to real an per Further, fiscal Solar hit. an shareholders' in detail, cap our reporting is in is for With not annual shareholders' XXXX. of XX, Diluted ended an equity quarter was came will the the increase share value increase which common throughout with Dave company each from the are increase for in the higher million at estate represents expense reporting The common which $XXX.X The expense the equity equity in quarter. decrease year, later share in per attributable in of compensation-related three in book to operating of in and year call, results, or for in results the to ended primarily million applied which $XX.XX, ratably months $X.XX reimbursements lower increase review mentioned the a financial expenses. which

incur in see XXXX, charges the cap, reimbursement third we another For expect to all expect of we hitting $XXX,XXX which to before quarter. the of

let for me Gary. call a review our of further portfolios, to Now turn over the

Gary Mentesana

two that Solar assets finance primarily energy partner and company the Thanks, Ventures Energy Capital liabilities liabilities. be in projects. portfolios: assets good Capital the and continue of company's alongside an In The everyone. other development to Mike, and mainly construction into three the and afternoon, institutional renewable Energy and invests organized capital portfolio,

increase balance and to by million XX. the increase, attributable the further was company's transaction. in $XX.X investments as in was Energy reported million June company's $X.X of discussed income, the or The book million Ventures, Solar was in of of as Ventures. XXXX, which, capital Solar equity the the investments all increased secured portfolio interest Capital our these of one million quarter, second to to million solar Hunt's equity $XX $XX.X investments of has this quarterly million lending consisting in the contributions the SDL, the of by the X.X% acquisition ownership company's attributable June value In value $XXX.X in of filing, increased $XX.X XX, of XX%. the a in Since at carrying of investments net

loan Energy was included income from from same acquisition recognized the will The months the of Hunt's interest with you second during on see XXXX of that the or XXXX. filing, and in Ventures the Table quarter, SDL. compared related of income portfolio, of in increased or receivable the company associated of investments of interest million of X $X.X with which these six Solar on investments the -- period and connection $X.X six As $X.X million the a for our months income the to for basis Capital million returns to in $X XX% of quarter-over-quarter in XXX% recognized equity $XXX,XXX million

loans their XX%. Ventures quarter to on weighted X% $XXX.X committed We over energy. XXXX X% the of Solar loan Solar over fees the June Solar X.X second from million origination the XX.X% from XXXX. XX. these remaining and million, pipeline, XX, in a which Ventures on generating of $X.X remains UPB, months March at based have June months and XX, March had $XXX.X any will $XXX.X weighted billion a loans capital of this have IRR The compared balance, of underwritten, make of capital invested ranged loan without on seek opportunity project-based Solar funded coupons been coupon been of portfolio. XX.X% commitments From through continues financing, the X% principal At which X of to was at in than to inception million, June weighted investments aggregate XXXX, of of an the for from substantially ranged attractive for to maturity XX. average of XX.X% all outstanding to enable the of debt of believe the for represent or And a and $X.X company average XX.X%, XX, at as that returns. average originated loans on Ventures, closed were which balances unpaid held the in XX billion renewable Approximately loss gigawatts though principal, company repaid completion loans additional risk-adjusted Accordingly, robust, the additional to that an down average continues higher originally Ventures during

second $XX.X June UPB respectively, the liabilities dispositions down to result other and Turning XX and Mike and bond-related XX of million, value quarter from respectively, million million $XX.X at March and assets was The of mentioned $XX.X that portfolio. $XX.X our significantly fair a investments the earlier. at as the million,

our quarter, that the terminated interest hedged financed our all significant and these bond-related a March million in and we Collectively, investments balance $XX.X $XX million all XX, agreements liquidity. and rate $XX sheet. transactions debt During million of of resulting the swap deleveraging also at total of return bond-related a of swap elimination generated

investments whether runoff, discussed a suitable determine is bond-related target prior continue meet be our individual and our investments in continue we environment. in low-rate they review that As new investment bond-related for remain to investments to calls, Consequently, difficult purposes. investment to returns on sourcing

as investments the million As continue when into a opportunities of result, Capital bond-related investments appropriate Energy we invested present remaining in recycle additional and $XX expect equity to to themselves. monetization

of assets to of not exception contribute the note, of quarter the consistently expect UPB we ended rate and rest assets the income. Hunt with unchanged quarterly in liabilities pay which a the the do to With million a X%, $XX other and the of portfolio

to realize their value. believe to continue what opportunities pursue these assets market monetize We and to we be

Dave, that, over With greater second detail. results Dave? the discuss I'll financial in our will quarter turn to call who

David Bjarnason

Thanks, Gary, everyone. and good afternoon,

second an our $XX.XX second tables basis. income the Item by our refer comprehensive per increased $X.XX overview recognized results, by regard, per I provide increased as quarter, share, I million. $X.X on book and to value which comprehensive we $XX.X loss. quarter In income quarter-over-quarter mentioned, $X.X net quarter, a other value of income, million to of to primarily of per increase the will driven an million of were which Form included $X.X increase As Mike share in book $XX.X of a Increases XX-Q. comprehensive this book value first the of X in in in Compared million. represented share various In million

Net an quarter, in $XX.X improved the by increase, which quarter first income drivers. reported to second million the several had compared

or bond that gains regard, the realization of were redemption significantly by investment either First, amount the company. first to however, million to quarter of the settlement million In quarter this investment the of disposal the derecognition the gains. investment earlier in compared the mentioned of increased value, debt second part book Gary holding while second to of realized neural gains securities $X.X quarter. the through transactions the of that investments first million in led realized were and of holding In $XX.X only quarter, bond in $XX.X holding

value recognized second that was in carrying the the derecognized than investments of the So less in first XX% bond quarter quarter.

investments earlier. also solar their was both Equity noted, increased. grow or certain average which This and with by of to funded of basis increased the a realized increase continues $X volumes in Hunt's outstanding the million company as new $X.X associated by quarter million to UPB Gary sale related connection loan and income $XXX,XXX estate a partner income the recognized interest Secondly, Gary for company related second receivable a limited origination holdings. as reported investments that SDL, quarter-over-quarter on with increased real for in the which interest returns partnerships loans XX% and approximately by property includes of gains in to of mentioned in

in Lastly, quarter fees. large decreased in by audit-related the the the audit about of portion second with down. of the professional total costs prior Consistent fees accrued XX% years, or quarter to recognized by quarter first due in a $X.X second expenses in part of stepped a reduction amount year-end and million,

of to in first quarter at the were level, in tied a December filing. businesses second as company's assets our compensation to fees, professional high options stock stock of XXXX. all comparing the expense exercised months in decrease million, discussed six of basis earlier, quarterly in growth Gary incurred reported company juxtaposed related is during reductions, expenses investment first a returns the that to this that The mentioned expenses decrease months broader which consistent various That management. a strategic But of common further narrative transactions, such sale six and X with in XXXX, connection part with outstanding total such well during reported in Hunt XX% in are as $X.X as total the decreases a to creating quarter reduction reflect XX, of when expenses. However, for Item the XXXX is cost in of including as first XXXX solar reduction a

In therefore, this in portion while in are interest with not. while company a hedging impact hedge effective considering associated While instruments measured changes items derivatives be appears with rate recognized model of the are no the in at managing interest instruments noting debt, with million will value of gains interest of fair the the fair company's hedged use in items, $X.X rates such hedged quarter It's connection drove results. company's net recognition such risk, instruments these drive that that when were important, the losses losses how like this mind largest the in hedging regard, may reporting income, items. connection offsetting interest net rate Consequently, subordinated instruments in and financial be positions. fair mixed value recognized company's value while second adjustments value changes kept or rate it at of fair

reclassifications increased equity-neutral by these increase in bond-related the million recognized quarter the of of in value in by and increased The the on $XXX,XXX driven by in to discussed losses first income investment comprehensive bond volume by was modestly earlier. that the were The investments redemptions compared the $XX.X net amplified the fair dispositions loss impact increase quarter. second of of quarter, first this net quarter. $XX While second majority million was other

this million $XX.X the partially respect second with net liquidity million resources, of is net first company's investing cash net offset and six million restricted primarily was financing and end XXXX, six unrestricted. had of was and decrease X by of the of equivalents company's of that capital in million driven in activities. $X.X which million provided $XX.X the months quarter, the cash by filing cash our and equivalents months Lastly, cash down cash, of Table the the used This restricted operating cash during of $XX.X of cash which at activities by XXXX. was decrease first during breaks the cash, $XX.X to company

back With Mike. that, I will turn the to call over

Michael Falcone

Dave. Thanks,

update year. to on second I'll provide of Q&A, the brief get a half approach our we the the to Before

As are that expressed update forward-looking events these not performance with to These statements. any in are could will future include current today the no forward-looking those are Capital financial a Listeners MMA statements in based Commission undertakes materially in and which on statements, The cause undue date results projections contained regarding place cautioned from reminder, the include information which of identified filings the of risks as expectations. of on hereof. significant subject of to to some obligation these comments and Securities forward-looking only comments Exchange to and the actual speak those differ reliance statements. company Holdings, which the company's uncertainties, forward-looking

mission sheet company's XXXX our we Energy deleveraging on Capital focus our return began significant The from continued directing significant investments swap the operations XXXX. transformation portfolio the away balance balance assets in business other on that into borrowings. our sheet, in of a and with the combined From continued the perspective, total

Second of equity related leverage deployed quarter themes to additional into that of increasing advanced with XXXX dispositions these amount with combined Capital the the bond-related of an Energy and of investments portfolio. elimination portfolio, further

in dispositions to increase further but financing may in We market the of seek continue coming favorable companies quarters. expect other financing assets the today's some may the to Capital some assets Energy in use capital debt portfolio -- we the company's persist. from In should proceeds company the also from cases, investments portfolio

we we continue to we that new to the look environmental impacts. identify returns always, investment initiatives or an opportunities generate risk-adjusted social We returns produce if to effort positive improve in invest at can retain will existing additional As think accordingly. flexibility attractive and

in one Russell This by when a threshold process company shareholder corporate we joining with with of process $XX established November the capitalization corporation XX. company for culminate the and million company of our to back goals rebalancing approval to FTSE. June the effective the Finally, by June achieved Index the sought it the year a started with market convert above approximately

consider opportunities to shareholder continue enhance additional to value. We

excited you and closing, for our thank to about continued In committed the shareholders, future we your we remain support.

open the questions. now to Operator? will We call

Operator

[Operator Instructions].

The first from question comes Venit. Greg

Gregory Venit

I the I'm call. only on guess guy the

Michael Falcone

Yes.

ahead. and Just you Greg. Are got Go us, we? have We others.

Gregory Venit

All right.

all -- to half what that's were to year. trying bonds, Is rest raise think million, of your there? of capital second the -- for So what $XX your the you you're around the I there if dispose of that's showing somewhere

Michael Falcone

Correct.

Gregory Venit

then number cash much in -- if $XX got? How million that was the you would that bring

Michael Falcone

Correct.

Gregory Venit

you're Uses cash loans know the additional that to have year, of far Okay. you part we fund of of second your half solar some the of? need that for committed so that to you

Michael Falcone

Correct.

Gregory Venit

we how As do know? of today, is much that,

Michael Falcone

$XXX-ish that half. million, The That sort is of total really number plus our or is is number? half minus. that the or number our whole Is

Megan Sophocles

Yes. It's million. about $XXX

Michael Falcone

a draw looks of -- And we up, and gross that there's -- we sort like essentially match share. forward. schedule so look that what payoff schedule the that million that's number and is way $XXX as our a

Gregory Venit

$XXX the right is and you between you believe $XXX million So of million. that your loans the for now year now and the end have contribution

$XXX Some of million pays the off.

Michael Falcone

Correct.

Gregory Venit

selling sold looks cash your that -- to -- do bucket capital up? off or like and $XX asset the So with bonds do I of you other either fill raising that of It you sort have it of think rest these has so borrowing? in or million how the you or -- some

Michael Falcone

recycle, there. there that's One the three is way. buckets are Again, of primary loans sort

way is... Secondary

Gregory Venit

million? $XXX

Michael Falcone

It's $XXX million.

we've I assets sell because think of need don't that ourselves takes the this the said -- the really we of and is all we'll looking rotating some the see just to way of out we pool. will these, to second these The bond underlying sell sell get -- pool bond as year out to of process estate while. a some are you just real that we

a as So second you've got bucket. that

Third is in that been place so regard in got more a there sort do that have one our accretive we partner, than we lines finally, we particular in bucket believe past right borrowings, Fundamental, will just and has because circumstances the and be where now. abundant capital more on we're would really and funded discussions then have and incurring we put in that than they've of now withdrawal can be that capital

Gregory Venit

So far may are as that revolving now be can credit you -- as capital? your borrowing, having target access a line you

Michael Falcone

years And leveraging. anywhere to think couple were if bond had you which Potentially. a XX% Yes, a of times, essentially is MMA we was pool return XX% we at mean we I where that from total various ago, levered. swapped, about

here today, kicking our which have here, we sub-debt has -- much in sit point. we really leverage, terms unlevered. in this there's but of not As constant mean at I we around a essentially asset-level we're place, been

we we enough lever can along plan and and plan can And like having and put the expect we're feel far talk believe but road portfolio. it to about about feel debt that on discussions to road enough we leverage down that we unfortunately, the of far the we we not execute level the those so And price. like we're our in we what have we are to the talk that fact yet, where is terms that look the would about ability solar assets

Gregory Venit

Okay.

there's or can? that to Or So range that's million $XX you or book whatever us? whether the can ask you you $XX is, with number no million share

Michael Falcone

of been a assets disclosure probably total shouldn't our sort this would and between I levered total for sort sort the -- that of of think Sort governor perspective to I'm we et structure, second. a we presents be XX% we'll a I have of market given that able the get and sense, of sort the up give lot but cetera. of the thinking range. one makes range, past, at about sure a sub-debt. that point, plus Whether that to that think don't that of not just from I that -- we in XX% overall say constraints

Gregory Venit

you the had solar. in So million the quarter in just $XXX

you might That able that be You think to XX%? leverage by would...

Michael Falcone

We the I I look of of $XXX MMA's at and in so, $XXX when million the that, put we on say, or market puts would that remains sort sub-debt Could stress capital or of company. equity-like say assets capital in front couple too $XXX million equity we Will or as of could. don't $XXX of a to total dollars That $XXX look the -- hundred what front much capital be of put sort million of I of in want to another you us? -- at million of would $XXX of think million? that total allow million. we have you million of that equity seen.

Gregory Venit

Okay.

are So seems credit, loans, I put a mechanisms -- all going an to and are if Is suddenly need you swaps you all kind this -- these on? those to there did mean, of going like Or of right? line do it short-term, have to interest type of average XX-month you rate are they adjust...

Michael Falcone

I'm to lock XX months, position, we in short-term current the the recycles in. at an isn't at short-term terms. feel right. because which but sure we as assets In long-term the But every the That's rates part because that not to we X those if Yes. that rate to look where the Board, -- is yet paper, short-term question we our look it's you ongoing where discussion with -- -- with paper compelled felt funding were the ongoing we need interest had were, lock you if in money

XX expect a So we reprice we would if or because that book period. we to an look, go month up, X have think, our in opportunity rates

Gregory Venit

situation, is [indiscernible]... which if people the Correct, ideal

Michael Falcone

where the we're can't we today that going we're economically, mark-to-market, swap debt down and gap Yes. But going economically, change against down and long-term where, the Sub offset And mean, value, hedge going economically, a a in through. protected -- -- swap not, get change sort the we're answer, did one at we've if sub where of look rates. in sort got so debt, the ourselves we've right? sub this another, we you through. liability, hedge to also does We interest liability right? rising I of and which sort this is in are -- that of not but so in have believe, the this is weird run position the weird we gets we asset they only I the debt debt's is place run

you when about... think So

Gregory Venit

Let's as not make look sure good. Right? [indiscernible]

Michael Falcone

the And discussion Yes. there well, revolver, that when with but we're -- I we'll people we down some are who it. how try understand And we are in come you -- do on there have that's people don't, hedging there day, so of decide I at and leaning I to think who But explain hedging, factor side we partial as against that a the end may the just the of yet. not ultimately, a to Board. think

Gregory Venit

Okay.

what sub -- June about subordinated talking the don't So says I track or it page million. Fair it million. slideshow in guess $XX $XX amortization debt, is is know XX, It I $XX million debt, value record. your presentation, is, says

saying purpose and I of... is -- because just long-term basically financing, financing cheap that that that and You up saying -- the it's mean, you're is cheap it bring -- that

Michael Falcone

Correct. Correct.

Gregory Venit

that not in And but... it's your value, book

Michael Falcone

Correct.

have do requirements, do mark our we on market. but We value we not time, GAAP fair is the to the -- fair for under accounting, based long a disclosed disclosure, have GAAP the value of liability liability, to a liability the

but And we of so that clearly, kind is a presentation we more long-term make valuable. which financing, to cheap, believe point can you investor it is we -- as the see, little rearranged

Gregory Venit

if you able $XX retire that debt of or or Yes. were It's million. $X that $X value at book to whatever,

to I if able think correct? were to of that isn't you you're it, -- If --

Michael Falcone

and rate size. company debt borrow the to subordinate that's might side cost the retire a that's flip our of under is, difference that it, what correct. of we present us of mathematically, value to what cost between market the If net The debt able were terms it

Gregory Venit

Okay.

with in number Solar somebody off more your mean, gotten Solar -- So Lending a a of -- pushing there's to listened it for Lending, there's area, area spreads you Are and of that borrowers starting shrink? interest like me sloshing on around yield, are cut seems Lending that looking there else facing the some calls if button. and In to Solar where in spreads the have money may down. the in I've other, I start for out lot rates a come competitive? to

Michael Falcone

cycle, help they're able isn't the our at is understand said most project hiccups. get kinds of market of X.X guys bit highly the they we better that more space the so our rates, have these What around could through anybody manage to truly through we day, point as less understands team was we get they folks the the the in them thing we business. with XX with. capital sloshes of who for deal space, important or And that interest competing developer to have had but that our hiccups, hiccups I'm and enjoyed even projects the end squeezed expectation started. proposition lender that a of found, however, any a the pay confident who understand was that understand to able more than that on returns that And far with a and the sort value Look, fund to than that business this them completed the we'll months, and the the is their ride maybe capital is you we how certainly -- to as There when in space. is help them

advantage. smart And that development is so And willing on remains we our I continues. least a think our up knock hope think And capital to pool I wood, place pay competitive that where, for it's at partner.

Gregory Venit

Mike, Lending, cycle Lending, you loans life the maybe and like Construction. -- there's there's it -- a and there's Development three So share us with Permanent looks could to these

Construction, think finally, pipeline, have the Construction, the being to look Lending end. categories. and difference of I the beginning Development I at Lending Permanent? at The kind Is way three you it? is that and Permanent between then of Development the understand

Michael Falcone

lot in there. almost and is -- around a is is Yes. there's We sloshing do Lending there Permanent It no lending. because easy that long-term capital lending, part of

I have done, books... relatively So -- we loan on one we've think our done

Megan Sophocles

Currently there's million UPB. of $XX two.

Michael Falcone

-- $XX It's time been a we loan. million unpaid -- of a did Yes. permanent years. balance. haven't can't we I couple the Two. but of last remember It's

Development ourselves combine And entities, asked gotten In loan right? And should We've and blurred just what's starts basically, what's is because can question for construction very and the the actually pretty start sense, Lending day, Construction a next funded construction construction. a those Lending. so the loan we development between construction Solar loan? Solar we the entities have the and they recently, the two has line point to is, development the purest to where funding developer get loan

and same not also structure hybrid a a So loan. now that of construction kind both into usually where of often the on we deal. roles -- there's development use usually if construction will loan loan both development loan -- construction we do do -- often do we we But

there. continuum It's a there's So not black-and-white.

Gregory Venit

Okay.

like your say is your right at $XX something. million would June, backlog, here, I at I'm million then, got it it. guess, if million of So when as look $X.X XX-Q I or the kind if which is permanent end I've I is looking of at it Construction right. $XX development And

it think I right. I have

Michael Falcone

about but right. Yes. That of sounds flows, and that sort ebbs

Gregory Venit

right. All

the things the million, call. partner XX% queue, in an in of it agreement the capital the of in one $XX that's contribute to your July, your capital So development entered says

bit. little about talked I think a you

capital So there call. was a

Is do step the right it? you're the didn't now. that not way it, You would capital realized then XX-XX to And so have up that they to they look at it. and seed

Michael Falcone

black-and-white was and to discussed partner as as it and in that was mean this quite wanted something I wasn't something Correct. that planned described This our capital we knew advance you do. it.

out ebb the to pay didn't of and as rough the said off looked and in normal XX% close, had of smooth them to was one as a flow got and fund deal ready they one as draw kind you So just in we order them deals of edges. and we at

Gregory Venit

Who SDL? is partner, capital in that

Michael Falcone

Fundamental It's Advisors.

I disclosed think them... we've

Gregory Venit

the are you've that Those Okay. all along? had people

Michael Falcone

Yes.

Gregory Venit

Okay.

there, I partner the and out says says further the the in, language why it anytime control -- partner you company says put -- into loan capital control know making ceded this XX-XX. all its in -- the it get decisions, work company agreement, the you don't to SDL this when So capital but making

-- like way the problem So that like decisions, it wrong you're situation I prior or to to is But seems it's this in always that look loan workout, something. control the sounds terms it? a at mean

Michael Falcone

normal we is, of in when each a to the sign-off XX-XX we're have the events on course circumstance So current workout. partners,

to that there much technically I'm previously is the has sure is and Just world on written. like an existed. workout, balance, There is When of than the pretty have that go and And if call different investment. party workouts, implication workout, a make it's to we all gets any, that that well isn't implication as this in a is majority out not it. we that point. the it -- get make the that the of or it so point approve that each about up until at the worked is correct a sign-off making real to they different if there we recommendation, disapprove will the circumstance

Gregory Venit

was when million the or you I November, thing $XX other $XX do that -- loan that you in the what, guess So something, million? was got Hunt

Michael Falcone

sale to -- goes sort LIHTC of that Hunt. different the were loan Hunt the the There MMA that's... portfolio, are of There two back

Gregory Venit

stock... $XX that the your That's Yes. million

Michael Falcone

amortizing that's is year. which million, next start books, we'll our on $XX

Hunt perspective, future, in Hunt to be, will, did, the at happened when where of simply what did number there's at time parties both we've pretty MMA is par would loan transaction the sort back was and than pay sort of we and -- loan deal, of and had defaulted paying if that risk MMA that other biggest fundamentals whatever loan we instead the or funded, included the funding, from the look The stupid. par in all know Hunt we the happened if that back pays that you might and rather not something money a of

that so way, will holding each that for off, and get pays a period. IRR that it So party, The struck their sale, that is get the transaction MMA, up, the Hunt the we each be The we a and you will books if a borrowing. that of on XXX. shows IRR each And get And from a X. our up IRR identical essentially, when GAAP XXX, get was an if we result as so X, is sale. true loan there is perspective,

year We the gone of in will of and expect gone quarter. cleaned first it to year, expect, early the end of be it the if But the gone be sort the by that's up. end not we by

Gregory Venit

didn't why part So fund of it? their Fundamental

Michael Falcone

In funded their Fundamental it. the this hunt rather Fundamental circumstance, of the funded extra. part than having fund extra,

Gregory Venit

stayed XX%. Hunt of fund in position. your Fundamental their came your to in part

the have didn't You do capital to it?

Michael Falcone

relatively Correct. it do event. thought how advance circumstance, we short-term was out? Correct. that And Megan, long the But a in you remember was

Megan Sophocles

for It full was $X month. about about million out -- a

Michael Falcone

it of -- -- sort drove that it. was So a was and was it short-term,

Gregory Venit

you credit, if or have you would have you capital, more -- would asked had had, come you been of the to had, line in. had Hunt if So

Michael Falcone

of right? get circumstances, Yes. line of credit I these mean, of to a of both rid point is the getting

Gregory Venit

Right. it. got I

Michael Falcone

Where MMA something may me plus cost loan something... yield and something, of would the yell be, everybody I the at what on X, can line credit I'm get fund X and sure the if and might credit, said if line MMA of

Gregory Venit

Did plus LIBOR XXX? you plus say LIBOR XXX?

Michael Falcone

we're where investing. not That's

Gregory Venit

you to No. borrow That's going at. what are

Michael Falcone

Your lips ears. to God's

trying that place. So make we want for to revolver MMA, to spread this get in we're so

Gregory Venit

Okay.

other notes. through my this with some -- going real So more estate, well, you hopefully sold estate. events because may real that than just there's I'm monetization the actually -- Two

from brought Is that? in you is think some something. $XX correct? that I I read or Did -- building that apartment a million

Michael Falcone

yes. bond, The

block was [indiscernible] the it bond. So

a are negotiate to So sale which financial to off, paid in and really of underlying... B-pieces, force When lot did when -- we of with bonds the A-pieces these it's got a B bonds or you've of A the a and an underlying the back crisis. get sale

Gregory Venit

where I properties, guess, what, like that other have type last, is had, you you So these a of three of correct? --

Michael Falcone

we had pay off? -- a Penn when Well, did Valley

Megan Sophocles

Yes.

three were bonds multifamily of kind that either subordinate piece. had As positions there other were subordinated a of X/XX, or in

disclosed. One redeemed think in and July, I that those was of three was

Michael Falcone

-- of bucks. a Penn and a that couple small it only and Valley, million yes, was was

are two left, bonds. Spanish there So then and TDD Fort multifamily the

Gregory Venit

I get properties I how know those for -- mean, are left, don't but are that it, sale two you I the that's control wouldn't paid, So mean you now? you right? know

Michael Falcone

one for is that. sale. there remember I mean, sort to these for to implications we're and through definitely sale selling getting on we've One working are tax and so all got

not advantage control. to if -- take rate this hopefully, -- not this of in either environment. in would our It's cap we entirely like So

on So we're working it.

Gregory Venit

the says $XX.X your by nonperforming received of million XX, affordable proceeds Okay. net Yes, housing, it April bonds. from one of sale secured you

Michael Falcone

Yes.

underlying the the to So cash and through bond sold, rolled flow property the us.

Gregory Venit

Okay.

bonds? or you still that other is -- million is -- that you so than $XX what, other a different And have... In kind words of of the have, these

Megan Sophocles

are was value bonds, bonds was About the Spanish remaining. million $XX about of $XX with of X/XX, multifamily bond. There associated $XX Fort as fair that infrastructure and of million million --

Gregory Venit

Okay.

future but is Spanish So as I the you're a for holder capital equity something. there mean, XX% think not lots that also I with holder I Fort, in an any sale... -- bond, for call you guess, there's in or equity you're either --

Michael Falcone

under we in few -- There choose could there in money value. that's year, create are. a the of it. bond the side. may partial, But we by because a the developing we and equity both put we the the circumstance that's some in thousand we mean, value I versus and lots timing -- equity measured to of be sort a think can where which function a payments of the be, that's at bonds. sale hundred It's dollars a on due most, We of but think

Gregory Venit

It but... was million. sold wasn't probably in there a yours, multifamily like Fort So housing $XX Spanish project for that

Michael Falcone

We land I developer. sold was wish it to ours. there a the

Gregory Venit

that multifamily To project? do

Michael Falcone

Correct.

Gregory Venit

-- look Are retailing. are any build? for I them any necessarily mean, a zoned? to multifamily, Are those those there an at of there any of there's for down of properties but are -- for that, zoned When I map, appetite you guess not

Michael Falcone

city. a we but not, discussion Currently the that's would like to explore with

Gregory Venit

need need clearly Is much retailing a there for not multifamily? of There's for it. that

Michael Falcone

indicate that The price for economic is would of that there it. demand project

there So we think is.

Gregory Venit

zone opportunity any... down there Is to there? -- an there Is to that an opportunity is

Michael Falcone

No.

Gregory Venit

designated That's as an not opportunity zone?

Michael Falcone

No. No.

Gregory Venit

piece, you construction million $X invested road's now XXX Okay. Russell final under the And the for bridge... -- then, there, the the

Michael Falcone

under construction. is The road

Gregory Venit

you mean, never your... up brought I in that

Michael Falcone

the moving construction is under construction, -- bridge is road not is bridge -- is yet. haven't the actually but Dirt awarded, started but they

Gregory Venit

Okay.

to like, for, or contract's whatever was or the the $XX So whatever. build bridge it road or the million

that, million invested right, this quarter? last $X You've into

Michael Falcone

Correct.

Gregory Venit

Okay.

capital being there -- call call capital -- for between is a this a there's completed, and for there that isn't So now a -- you?

Michael Falcone

We're half hook on and bridge. for the cost for the total of the road

Gregory Venit

property else million put have So $XX $X you Or million, you with in, to million? $X another say, you million, it? somebody $X the come -- so million put up and $X you've gets sell

Michael Falcone

Correct. That as well. market is on property the

Gregory Venit

what's I bridge done? Any or built down there chance the being and are -- of there, guess appetite people -- I would saying down what's or an want -- there the waiting indicate this with is they road

Michael Falcone

There's a waiting get in. long line to people of

see will we'll to what process and we I know, happens. right? have think don't we -- starting marketing a Now We're

Gregory Venit

Okay.

of change multifamily some unless zoning? So down to -- you there, XXX or got applied or then got the have XXX and you you've retail, units

Michael Falcone

about right. That's No.

Gregory Venit

owner. build multifamily So company, does ever parent Your housing? Hunt your

Michael Falcone

Occasionally, but core not business. it's a

Gregory Venit

if away they Solar would right. be let's right. something be from But I thing Mike, doing that say, All of going All or you'd either Spanish wondering the think... Lending, by your was Okay. this would value guess. ourselves. that just I I enhance Fort, if it

Michael Falcone

Yes.

balance think our trying and ability we're the you and so that's what I the simplify to to it. doing. We're understand on company, sheet hit

Gregory Venit

of So an the capital equity view, raise. it? it that raise, Is when That's way be at look of thinking you not a you're line kind credit. would the to

Michael Falcone

Correct. Correct.

Gregory Venit

right. All

the... anybody there's am anybody if Or -- waiting? think I there I that -- is

Michael Falcone

I don't know.

asked. haven't We

Operator

like back Michael Falcone I conference concludes over the any for question-and-answer [Operator turn Instructions]. remarks. our to would This closing to session.

Michael Falcone

their I'd We're and all to we're you good of have front like forward opportunities And everybody company forward. very move summer. for continuing to in the the support, of to the about a rest Thank thank looking everybody excited much. us.

Operator

Thank for presentation. has today's conference now The attending concluded. you

You disconnect. may now

MMA Capital (Trading Symbol(s) MMAC MMAC) 13 Aug 192019 Q2 Earnings call transcript