CharterMac Closes $75 Million Revolving Credit Facility and Completes $100 Million Bond Securitization Financing.Business Editors NEW YORK--(BUSINESS WIRE)--April 3, 2003 Charter Municipal Mortgage Acceptance Company ("CharterMac" and, along with its consolidated subsidiaries, the "Company") (AMEX AMEX See: American Stock Exchange :CHC CHC Chicago Cubs CHC Community Health Center CHC Chestnut Hill College (Philadelphia, Pennsylvania) CHC Congressional Hispanic Caucus CHC Community Health Council (UK National Health Service) ) today announced that one of its subsidiaries closed a $75 million Secured Revolving Tax-Exempt Bond Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. Warehouse Line of Credit with Fleet National Bank ("Fleet") and Wachovia Bank, N. A. ("Wachovia"). In addition, a separate subsidiary of the Company closed a $100 million bond securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. transaction with the sale of tax-exempt multifamily housing trust certificates through Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. , Pierce, Fenner & Smith Incorporated ("Merrill"). "CharterMac is extremely pleased to have completed two very substantial capital raising transactions," said Stuart Rothstein, Executive Vice President and Chief Financial Officer of CharterMac. "In addition to expanding our lending relationships with Fleet and Wachovia, these transactions enable the Company to diversify its sources of debt capital and to better manage the timing of its capital markets activities. The bond securitization with Merrill also helps us manage our interest rate exposure with a two-year, fixed rate financing." The financing received through both the credit facility and the bond securitization will be used by the Company to fund the ongoing acquisition of tax-exempt multifamily housing revenue bonds. Credit Facility On March 31, 2003, the Company closed its $75 million secured credit facility with Fleet and Wachovia. The facility has a term of two years, with the possibility of a one-year extension at the Company's option. The Company's interest rate on the facility is floating and is based on the London Inter-Bank Offer Rate ("LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). ") plus 1.50% or the Prime Rate plus 0.25%. Drawings under the line can be repaid at any time without penalty. Bond Securitization On April 1, 2003, the Company closed on its sale of Tax-Exempt Multifamily Housing Trust Certificates Series 2003A (the "Trust") through Merrill. Pursuant to the terms of the Trust, the Company contributed 19 fixed-rate, tax-exempt multifamily housing and senior housing revenue bonds totaling approximately $196.8 million in aggregate principal into a trust, out of which was sold $100.0 million in Class A Certificates to various institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . The Class A Certificates bear interest at the fixed rate of 3.25% per annum Per annum Yearly. for two years. A wholly-owned indirect subsidiary of CharterMac retained the subordinated Class B Certificates totaling approximately $96.8 million. CharterMac has agreed that it will hold the Class B Certificates until the Trust is terminated. Revenue Bond Financing On April 1, 2003, CharterMac acquired four tax-exempt multifamily housing revenue bonds totaling $4,028,000 secured by Riverbend Apartments, a 98-unit multifamily housing complex to be rehabilitated in St. Louis, Missouri. Adjustment Subsequent to CharterMac's announcement of earnings and during the course of marketing the asset underlying the Lexington Trails loan for sale, CharterMac determined that it was appropriate to record an additional write-down to reflect the impairment of the Lexington Trails loan. As such, the financial statements included as part of CharterMac's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filing include an additional impairment charge of approximately $390,000. This charge reduces CharterMac's net income from approximately $61.2 million for the year ended December 31, 2002, to approximately $60.8 million but does not impact Cash Available for Distribution ("CAD"). About CharterMac CharterMac is one of the nation's leading full-service multifamily finance companies, providing capital solutions to developers and owners of multifamily rental housing throughout the country. CharterMac's current revenue bond portfolio includes direct and indirect interests in revenue bonds secured by approximately 35,000 units of multifamily housing properties in 25 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . For more information, please visit CharterMac's website at http://www.chartermac.com or contact the Shareholder Services Department directly at (800) 831-4826. Certain statements in this press release may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements speak only as of the date of this press release. CharterMac expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in CharterMac's expectations with regard thereto or change in events, conditions, or circumstances on which any such statement is based. |
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