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AMERICA FIRST MORTGAGE SERVICING CO. L.P. I ANNOUNCES NOTE REDEMPTION

 AMERICA FIRST MORTGAGE SERVICING CO. L.P. I
 ANNOUNCES NOTE REDEMPTION
 OMAHA, Neb., Oct. 14 /PRNewswire/ -- The board of directors of America First Mortgage Servicing Co. L.P. I announced today that it will redeem 25 percent of its outstanding notes. These 12 percent notes, due in 1998, are collateralized by United States government zero coupon bonds. The zero coupon bonds have appreciated in value since they were purchased.
 The company services a portfolio of approximately 9,585 mortgages and acquired the zeros in 1991 to collateralize the notes and to act as an interest rate hedge. As the company planned when it developed this structure, the zeros would appreciate in value if interest rates would decrease. "In today's interest rate environment, note redemption is prudent both because it allows us to capture the 15 percent appreciation in the value of the zero coupon bonds and at the same time to significantly reduce our interest expense," said Michael Yanney, company chairman. "We have a strong company with an excellent servicing portfolio. This action proves that the structure of the investment is sound and will further strengthen the company's earnings' potential."
 The company's remaining 12 percent notes, which trade on the American Stock Exchange under the symbol AFM.S., are fully collateralized at maturity by the remaining zeros. Interest on the notes is paid semi-annually.
 Notes to be redeemed will be chosen by lottery among the company's investors. The redemption is expected to occur 30 days after written notice is mailed to record holders of the notes to be redeemed.
 -0- 10/14/92
 /CONTACT: Maurice Cox, Jr. of America First, 402-444-1630/ CO: America First Mortgage Servicing Co. L.P. I ST: Nebraska IN: FIN SU:


MC -- DV009 -- 0085 10/14/92 17:00 EDT
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Publication:PR Newswire
Date:Oct 14, 1992
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