America First Tax Exempt Investors L.P. is a consistently performing fund with a portfolio of federally tax-exempt mortgage revenue bonds; interest on these bonds is excludable from gross income for federal tax purposes. As a result most of the income earned by the Partnership is exempt from federal income taxes. America First Tax Exempt Investors L.P. has a market cap of $80.3 million; its shares were traded at around $6.15 with and P/S ratio of 4.4. The dividend yield of America First Tax Exempt Investors L.P. stocks is 8.8%. Highlight of Business Operations:Debt maturing in 2009 consists of the entire balance of the TOB facility of approximately $76.6 million plus approximately $19.9 million of mortgages payables on MF Properties. Subsequent to March 31, 2009, the Company received a firm commitment for a new secured credit facility from Bank of America which will refinance the current TOB facility. The new credit facility will have a one-year term with a six-month renewal option held by the Company, an annual floating interest rate of one-month LIBOR plus 390 basis points and a loan amount of approximately $50.0 million. The proceeds from the new credit facility plus the current cash collateral held by Bank of America for the TOB facility will be used to retire the outstanding balance on the TOB facility. The new credit facility is expected to close before June 30, 2009. In addition, approximately $19.9 million in outstanding mortgage financing related to the MF Properties located in Ohio and Kentucky is due in July, 2009. This mortgage loan contains three one-year renewal options held by the borrower. The borrower has provided the appropriate notification to the lender and intends to renew the mortgage for an additional year from the original maturity date. The Company also continues to explore refinancing opportunities for this mortgage loan. While the Company expects to be able to renew or refinance current debt maturities, if the current illiquidity in the financial markets continues or further deteriorates the counterparties on our credit facilities may be unable or unwilling to meet their commitments and our ability to renew or refinance our outstanding debt financing may be negatively affected.
Compared with the terms of the Company s existing TOB facility, the terms of the new credit facility will increase the effective interest rate payable by the Company and will also reduce the amount of debt financing available for additional investments. Both of these factors will have a negative impact on the amount of CAD generated by the Company. The general partner has completed financial models in order to estimate the impact of the change in credit facilities on CAD. In order to ensure that cash provided by the Company s tax-exempt mortgage revenue bonds and other investments will be adequate to meet its projected liquidity requirements, including the payment of expenses, interest and distributions to BUC holders, the general partner intends to change the Company s policy regarding distributions. The Company s regular annual distributions have recently equaled $0.54 per BUC, or $0.135 per quarter per BUC. Beginning with the second quarter 2009 distribution, the general partner intends to make the Company s regular annual distribution equal to $0.50 per BUC, or $0.125 per quarter per BUC. The general partner believes that distributions at this level are sustainable, however, if actual results vary from current projections and the actual CAD generated is less than the new regular distribution, such distribution amount may need to be reduced.
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