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MMA Financial, LLC A MuniMae Company

MMA Financial, LLC A MuniMae Company. Sale Strategies Presented By Michael H. Gladstone, Esq. IPED – Boston, MA. October 11, 2007. Sell Property Before Y15 . Is property key to fund yield? Reduce risk by selling New capital New management Bond Indemnities

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MMA Financial, LLC A MuniMae Company

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  1. MMA Financial, LLCA MuniMae Company Sale Strategies Presented By Michael H. Gladstone, Esq. IPED – Boston, MA. October 11, 2007

  2. Sell Property Before Y15 • Is property key to fund yield? • Reduce risk by selling • New capital • New management • Bond • Indemnities • Buyer is more important than price

  3. A Pre-Year 15 Exit • Selling before Year 15: balancing act • But generally not before Year 13

  4. A Pre-Year 15 Exit • Pros • Take advantage of market opportunities • Strike while iron is hot • Reduce expenses • Reduce exposures

  5. A Pre-Year 15 Exit • Cons • Buyer may not comply with rules • Difficult to monitor (but if we finance buyer…) • Bonding expenses

  6. Case Study – Sale as Workout Strategy • Hayden Pointe Apartments (Las Vegas) • 252 unit garden-style • MMA took over as GP in 2000 • Deficits of $400,000 per year • $ 715,000 in LIHTC per year • 2 years remaining credits

  7. Case Study con’t. • Options: 1. Sell some fund credits (coupled with default refunding/refinancing of property) • Sell property Investor favored sale

  8. Case Study con’t. • Forbearance Agreement with Lender • Sale paid Lender in full • Modest distribution to Fund • Received 85% of LIHTC • Strong, reliable buyer • Avoided recapture

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