Greystone Housing Impact Investors LP (NYSE:GHI) has concluded a significant financial arrangement by redeeming its M31 Tax-Exempt Bond Securitization (TEBS) facility and terminating related agreements with the Federal Home Loan Mortgage Corporation (Freddie Mac), as reported in a recent SEC filing.
The termination, effective October 15, 2024, allowed Greystone to exercise its rights to end various contracts including the Subordinate Bonds Custody and the Bond Exchange, Reimbursement, Pledge and Security Agreements, among others. This move followed the redemption of all principal and accrued interest on the M31 TEBS facility, which was initially backed by 13 of Greystone’s mortgage revenue bonds, two of which had been previously redeemed.
The TEBS program, facilitated by Freddie Mac, had issued Class A and B Multifamily Variable Rate Certificates, representing interests in the securitized bonds. With the facility's termination, outstanding Class A certificates were fully paid, ending investors' entitlements to cash flows from the securitized assets. Greystone, through its affiliate ATAX TEBS II, LLC, held the residual Class B certificates.
Subsequent to the closure of the M31 TEBS facility, Greystone reallocated the remaining mortgage revenue bonds (MRBs) to various financing solutions, including Tender Option Bond facilities and a short-term financing facility, while taking ownership of one MRB. The partnership covered the redemption using funds from these transfers and cash reserves, without incurring early termination penalties. Outstanding borrowings under the M31 TEBS facility totaled $65.5 million at the time of termination.
In other recent news, Greystone Housing Impact Investors LP has shared its Q2 2024 earnings report. The company reported a net income of $0.19 per unit and a cash available for distribution (CAD) of $0.27 per unit. Additionally, a non-cash unrealized gain of $211,000 from its interest rate swap portfolio was noted.
CEO Ken Rogozinski also announced a regular quarterly cash distribution of $0.37 per unit. The company's investment portfolio comprises $1.3 billion in affordable multifamily investments and $158 million in joint venture equity investments. The physical occupancy rate for their mortgage revenue bond portfolio stands at 91.9% and the leverage ratio is reported at 73%.
In terms of future developments, Greystone Housing Impact Investors LP is actively working with clients to deliver cost-effective capital and is pursuing new joint venture equity investments. The company expects the gross issuance for the year to exceed $400 billion, with year-to-date fund and ETF flows totaling $11.5 billion. Despite the higher U.S. treasury yields, the company maintains a robust investment pipeline and sees an uptick in fund and ETF flows.
InvestingPro Insights
Greystone Housing Impact Investors LP's recent financial maneuver aligns with its broader strategic approach, as evidenced by several key metrics from InvestingPro. The company's dividend yield stands at an impressive 11.01%, reflecting its commitment to shareholder returns. This is further supported by an InvestingPro Tip highlighting that GHI "has maintained dividend payments for 39 consecutive years," demonstrating long-term financial stability despite market fluctuations.
The company's price-to-book ratio of 0.93 suggests that it may be undervalued, which could be of interest to value investors considering the recent financial restructuring. Additionally, GHI's strong liquidity position, with liquid assets exceeding short-term obligations, provides a solid foundation for financial maneuvers like the TEBS facility termination.
For investors seeking a deeper understanding of GHI's financial health and prospects, InvestingPro offers 7 additional tips that could provide valuable context to the company's recent actions and future outlook.
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