ATAX - Earnings call transcript Q3 2019 | Greystone Housing Impact Investors LP

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Operator

I would like to welcome everyone to America First Multifamily Investors, L.P. NASDAQ's ticker symbol ATAX Third Quarter of 2019 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. After management presents its overview of the third quarter of 2019, you will be invited to participate in a question-and-answer session.

As a reminder, this conference call is being recorded.

and third team, conference quarter ATAX welcome you call. of ATAX's to of behalf its thank management and On XXXX earnings

not or and uncertainties During ATAX, could statements. cause statements comments call, or that differ are historical future materially actual are these events and risks this forward-looking to facts, to made subject the are results conference which regarding from

made of Act statements are pursuant the of Securities forward-looking Safe provisions to Such Harbor Reform Private Litigation XXXX. the

identified use other of be may, by expect, plan, and like can focus should, similar statements Forward-looking the words intend, terms.

or these You actual by are ATAX's and forward-looking or cautioned as statements today. the that competitive, factors in other forward-looking results Changes to today's projections economic, regulatory implied business, made of expressed statements date. differ cause only materially could speak those from

For filed they these more risks and Internal ATAX will expectations upon which impact ATAX's if and periodic may time-to-time base please Securities not its and you that beliefs Exchange from other the by may informed. other reports detailed review with be and the change, about business, necessarily do, documents projections factors information Commission. ATAX

Today's will during call. aware to take be want the session. measures, non-GAAP of this question-and-answer SEC you discussion operating that to and explained make under is encourage you include We ATAX the will FD and Regulation full advantage

and over your in I like ATAX. participation for interest Daffer, Officer Chad to call Thank Chief of turn you the would now Executive to ATAX.

Chad Daffer

trade Then taking update results. I quarter the X.XX future and slower reported US partnership. Craig interest recession. will economic looking Concerns Today, threats of Craig share and with on at our we'll the the economy, concerns economic ATAX partnership around %. to forward call. are the CFO third Economic an quarter expansion my China the and questions. continued projects about uncertainty increased growth Welcome of to the and in with globe XXXX policy Allen, you. have growth weakness earnings your ATAX third domestic present with Thank the rates data thoughts on of

the economic data, current resilient. the Given markets labor remain

quarter, consumer the For average at for continued with unemployment hourly strength and statistics X%. rate earnings spending. year-over-year the positive All X.X% labor of the increasing household the of

at With inversion and the cuts possibilities their being December equity with rate Expectations markets third curve this rates of high year future the will FOMC Fed yield October are to for on the trading meeting cut X.XX% all-time time of XXXX. short-lived, the the XXth. XX in pause

lower fundamentals beyond, of to in horizon a housing growth, partnership support and the the occupancy with and consumer interest environment With rate XXXX rental the of promising. strong credit prospects of is multi-family strong

the the First, due We're exempt of growth missing housing, we're about our middle the workforce mortgage providing the to our assets revenue opportunities XX% partnership bond optimistic strategic and for investors. returns tax-exempt tax inclusionary demand zoning. for seeing increased reoccurring portfolio, affordable housing for

strong for providing of rewarded and In business, low returns The partnership credit our discipline the investors, rate equity XX% our to interest environment. housing. has markets, partnership assets above our multi-family development market of core been

the and segment in this of XXXX. in we the of the in on the disciplining are partnership focus growth this While we'll into class, business investment partnership asset capital

turn the third to time, this to of At present quarter. Allen like to the results I'd financial it over Craig

Craig Allen

to from XXth of base XXXX. total were a Chad. increase been asset about billion. December you, Thank Total September able $XXX XXst million at our $X We've assets at

about the is As bonds revenue to our at of Chad XXXX. XX% end September, mortgage mentioned, assets total

At we million We we end in about for we the been units bonds have had have from hold XXst bonds revenue in percentage December of and $XXX mortgage September, invested increasing are properties approximately on XX,XXX about bonds, Of bonds. gradually Texas, Carolina. revenue that that assets those XX accounting of bonds, mortgage of And of South within XXXX. states. of those with within XX $XXX in intact XX% XX those mortgage bonds revenue held the California of XX million

year. those XX% XX our value lent fair for service our our revenue mortgage under different of throughout three bond requirements the the of portfolio, XX bonds and held from at we current revenue today. revenue mortgage our revenue sheet is states the takeaway September that balance developers are of debt all And United bond big States, bonds mortgage accounts on to XXth money mortgage Within have portfolio this of

or being continue properties a University. In the project State to Suites past, student housing multifamily two XX/XX the investments other is we've student are Paseo, talked housing MF on from approximately the the name project in two multi-family Those Lincoln, One across a on of by multifamily the And is Nebraska we units. University Diego at own Paseo, San located that's properties; is Nebraska-Lincoln the of MF street projects. right our about which campus. XXX

little or our a in the development about Chad make. assets mentioned that Vantage investments equity the bit or investment we

have Just Vantage XXth, at invested update we to projects you totaling nine give X,XXX. in September an

We have four investments in the State of Texas.

two State and in South one investments Nebraska, the two in in million approximately the Tennessee. projects. invested Carolina Vantage We of in $XX We've have

we the in in for Texas; in nine South about one two benchmark mix different in two a December Just talk in and a minute. And on Nebraska; comparison Florida give Florida. bit invested project Tennessee; in XXst projects, XXXX, just I'll to had you little Carolina in three a of one

early QX in very of in projects in Vantage invest which that Vantage over we the QX the XXXX. million. in since committed $X.X we've the XXX life where and XXXX It's unit at X,XXX had rate O'Connor late committed Vantage other to the those The -- project presents early XXth is XXth. at investment have in We Vantage and subsequent similar about invested September a market the deals located million a and We've of had investment we October units. of done. We equity invested nature Vantage event first investment Antonio. since $XX accounted invested O'Connor San Vantage to of for We in

there located City redemption equity investment. XXXX. sale as to Panama beginning located XXX property the ATAX in in committed contributed Beach multifamily at Panama Beach, date, major is our at invest --was $X A we The its a equity of event March rate investment was City transaction, about million we've To the Florida. sold unit equity contributed Vantage project market -- City Beach. occurred, Panama had or Vantage into of

sale and the approximately was our investment XXXX Our through redeemed that QX, reported million. equity we XXXX September was in in the sale gain on of gross $XX.X

you recognized on We've Vantage. had been have gains or projects Vantage history sales contingent the give a four Just through sold of or million bit ATAX of those interest $XX.X four to by been redemptions gross sales. little has and of that redeemed.

And as have calls, that our invested numerous is and mean to accounts on as of this continued we has we proof-of-concept a what about holders. the benefit mentioned other invested, why on important for a and first Chad invest to just and I I on CAD why the $X.XXX unit happened we times we of and BUC. Vantage investment It's back per really since continued

projects worth amount million $XX in $XX.X In XXXX, XXXX, XXXX consistent in the in at invested yet $XX fairly one Vantage into we've $XX.X in point in that And about In we have back we we XXXX, of invested this XXXX we million investment commenced exception about may per investments at of since class. committed XXXX. XXth equity total when we range in Vantage to to year. invest find of equity September and with the track you equity XXXX. data early million asset XXXX, And million our last we've XXXX, $X.X that since inception of projects. look is is approximately interesting our that One invested back million

of continue transactions now to fine very our significant Shifting XXXX. of to our a business during We the on we talked since as we've the side balance quarter. you liability that had about of on on in couple early sheet tuning the

Freddie refinanced rate doing and the also TEBS variable to on were and we in the rate M-XXX so financing fixed maturity M-XXX We M-XXX. and converted M-XXX First we debt that each with date Mac. extended

that to so about XXXX XXXX, we example, extended of and August from an extended years. X.X duration As M-XXX the was we May of

and debt refinancing of In extended to XXXX July XXXX of September of million X.X from July maturity about that years. $XX.X year. addition, extended the M-XXX, in we about represents this that And

financing Another with debt transaction was Mizuho. financed into We option arrangements where tender investments. eight bond entered we

total was The those five bonds PHC investments. So million levered about proceeds into of we three variable each of rate mortgage gross debt amount trust we've one-year levered a financing. under was that of and entered and our revenue $XXX.X

to was that sheet us the had the diversify is fine possibilities This banking goals of that investment financing. important because one would tuning balance we set an of our the provide debt part to of

this over options debt embarking to is of debt our result fixed about precipitous to five Again, to regular transaction use now liquidity to this financing, said the financing. provides Bank investment a we a fine additional third accomplish and Deutsche tuning two upon rate that last basis trying variable the partnership. we've represents financing Morgan the the on the that So other these are move and The rate task years from Stanley. bank provide us which

fixed of XX.X% our rate to was was In of XX.X% year, is XX.X% of and XXXX, Fast-forward is in debt mode. debt financing a XX.X% of in mode. our variable. variable rate a financing XXth debt financing our fixed September this

So we've XX.X%. the to moved variable rate recap, rate XX.X% from XX.X% And today. financing we've XX.X% moved the to to fixed from

was from to sensitivity. rate it fund we've that better again interest to an upon embarked So insulate intentional our strategy try

quarter have Trust event of note the that third the of credit. happened form in was of Another that lines we extension Bankers relationships two during the some with of

we've that ATAX two XXXX a had of additional is it May provides with sources liquidity. This since of relationship and

operating credit the an operating June $XX extended credit, to million line of line $XX XXXX. operating We've of now being first maturity that The line. million of with

extended that unsecured, every of of XX-Q page and rate our this second in unsecured line interest we we've of an between The the of fruits impact of be in the $XX million The We to. of disclose credit found an that increase that anywhere basis labor XXXX interest and points of measure to XX and released. XXX XX every in rates. QX maturity XX-Q June we just quarter can and well quarter is all XXth these, sensitivity as is this

It XX-months assumes it is change for and instantaneous in assumes we do this. that response that to the nothing

points rate points. find banks XXX for and sensitivity rate measure it's it's referred you very instantaneous similar very, key we're what to at increase XXX distribution. the about typically the seen So $X.XXX here and basis basis a it again, that XXX cash banks the And a as debt rate fixed we shock on also this or plus don't to again, interest We've to will also our impact would as shock portfolio cash we the And rate about $X.X shock. available positive a rate for We in of over million strategic as XXX at it's too move XX-months. interest react exposed in variable time. an or to is our impact, to a of an of is improvement points financing our have result and from books placed caps rate, that well

the Our for total million. a $XX.X and quarter was on $XX.X year-to-date million revenue basis

and $X.XX Our per and income basic unit year-to-date on diluted total net basis BUC $X.XX a per per BUC.

value. the on book share And basis. last BUC. value BUC metric available at per $X.XXper net year-to-date typically $X.XX end was And quarter book for with XXXX approximately distribution of we for a cash our and is you $X.XX the net September, the Our

and more With bit little that questions take would about talk the have you that to you to I fund. happy and be a Chad might

Operator

[Operator Instructions]

Stewart Jones Jason Our from first with question Trading. comes

open. is now line Your

UnidentifiedAnalyst

Good Hi. afternoon.

the a stand --to made or Where see the say progress You've expected in of next that quarters. that lot you be we over balance few we sheet. process tuning optimizing would expect

ChadDaffer

give know, we we're indication don't give on usually try things guidance. and in going the any Jason, future to do future that I and

best some move to I move discipline think housing. the we've of core investments. alternative back been away very want to we past of clear our And about in the multi-family

happen, and Jason. available will will events for those market execute when the investors, they'll as be price highest best sensitive far As

UnidentifiedAnalyst

sheet Let six differently. fixed-rate mix floating there? try of balance me going bit more Are ask the to with a Are you you the exposure to little debt continue comfortable add liability the of today? side to

ChadDaffer

No.

the where rates given interest XX what --basically next fix over think we're are here reducing with done between to the variable years. to the XX we the we've I relationships I fixed last content and variable couple months, in with to going think inverting think

action exposure, what those rate either much in But we positions date. or I we've accomplished the that so to in feel hedge we're -- And think to appropriate event take variable the order pleased to that with we'll and swaps. have caps with we do too try

took curve. advantages I the big think a given that, a yield step M-XXX of flat towards

way of risk moved metric an big we is I for acceptable finding think we've a fixed. in variables direction what the think

UnidentifiedAnalyst

Okay. and My part. been that Congratulations on agree progress. I it's the other tremendous question--

ChadDaffer

you, Thank yield curve.

UnidentifiedAnalyst

yield curve. you, Thank

obviously, paid back in do of What today yield, great the then into say you capital, incremental the look? and get of I does at some on that as your to looking returns returned you these you gain there. profiles you move set big about what next? Obviously, redeployment look --what think of-concept on the close On are return. plus would how like proof- investments? And proof-of-concept. When but do opportunity

ChadDaffer

revenue is discipline. That's spread you mortgage as know. book We under book have portfolio. disciplines, Jason, two core our One our core our

environment flat book double over business are yield profile for investors. on and growth had in yield competitive curve opportunity returns still our with digits. The into XX taking Texas higher to to move last of The outside is redeploy of -months, road the low leveraged seeing originations real deals into delivering that outside the more Given team on the the very that platform the the going the development are We're at opportunities We our for to down. returns and proof-of-concept solid. attractive and our area. the XX is nice Florida. a the ability of The

so Front as between We're somewhere assets. business XX% continue to opportunities XX% and Range, Carolinas about the of in at book and both of try we the that manage to looking to

returns going like-type our we're to and little see a that with think opportunistic redeploy higher XXXX. investments, bit try best-in-class in Texas I the in to we to done look forward can into and more what replicating developers chase if we've going look

End of Q&A

Operator

at in questions this I'm further showing time. no queue

question-and-answer will Thank you that for So today's conclude conference and call. gentlemen, this participating. Ladies session. concludes today's

disconnect. may You now

Greystone Housing Impact Investors (GHI) 5 Nov 192019 Q3 Earnings call transcript