Multifamily Bond Financing.Back in Vogue
Transcript of Multifamily Bond Financing.Back in Vogue
Multifamily Bond Financing –
"Back in Vogue"
Moderator
Barry Krinsky, CITI
Panelists
David Danenfelzer, TSAHC
Helen Feinberg, RBC Capital Markets
Jim Spound, R4 Capital Funding
Cody Wilson, Stifel Nicolaus & Company, Incorporated
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10-Year UST 30-Year MMD
With US economic data still tepid and global growth
slowing, interest rates have trended lower over the
past month.
Historical Performance of 10-year UST versus 30-year MMD
Source: Bloomberg. Thomson Reuters
Reflects market conditions as of July 15, 2016
Thomson Reuters Municipal Market Data (MMD) AAA curve is a proprietary yield curve that provides the offer-side of AAA rated state general obligation bonds
25-year average = 4.78%
07/15/16 = 2.05%
25-year average = 4.59%
07/15/16 = 1.58%
Despite the threat of higher interest rates, long-term
municipal bond fund flows have been positive since
September 2015.
Source: ICI Group
Numbers in millions
Reflects market conditions as of July 15, 2016
$0
$500
$1,000
$1,500
$2,000
$2,500
Long-Term Tax-Exempt Mutual Fund Net Flows
Since September 2015, net inflows have totaled $46.6 billion
Credit spreads continue to contract as investors look
for yield.
Source: Bloomberg. Thomson Reuters
Reflects market conditions as of July 15, 2016
Thomson Reuters Municipal Market Data (MMD) AAA curve is a proprietary yield curve that provides the offer-side of AAA rated state general obligation bonds
“BBB” Credit Spread over “AAA”
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Average = 123 basis points
07/15/2016 = 77 basis points
Dogwood Housing, Inc.
Alabama, Mississippi, Tennessee, North Carolina
■ Bond proceeds were used to acquire and rehabilitate nine (9) multifamily residential
rental housing facilities comprising a total of 539 units located in various locations in
AL, MS, TN and NC
■ All properties are operating under a project-based section 8 HAP contract and have
an average REAC score of 97
■ Financing Summary
■ Proforma DSCR of 1.26x for Series 2016A and 1.20x for Series 2016B
■ Rehab per unit = $5,025
■ LTV = 93%
■ 35-year term / 35-year amortization
■ Non-recourse, no credit enhancement or mortgage insurance
■ Optional call in 5 years at 105%
■ Series 2016A financing rate = 4.07%
■ Subordinate Series 201B financing rate = 5.12%
■ Blended financing rate = 4.10%
Source: Bloomberg. Thomson Reuters
$23,150,000
Public Finance Authority
Multifamily Housing Revenue Bonds
(Dogwood Housing, Inc. Project)
Series 2016
Standard & Poor’s Ratings
Series 2016A
“A-”
(Subordinate) Series 2016B
“BBB”
Stifel, Nicolaus & Company, Incorporated
Sole Manager
June 16, 2016
Tulsa Pythian Manor, Inc.
Tulsa, Oklahoma
■ Bond proceeds will be used to refinance and rehabilitate two multifamily residential
rental housing facilities known as Tulsa Pythian Manor (151 units) and Pythian
Manor West (101 units)
■ The projects are operating under a project-based section 8 HAP contract and are
designated towards seniors ages 62 and older
■ Financing Summary
■ Proforma DSCR of 1.49x
■ Rehab per unit = $21,532
■ LTV = 94%
■ 35-year term / 35-year amortization
■ Non-recourse, no credit enhancement or mortgage insurance
■ Optional call in 5 years at 105%
■ Series 2016A financing rate = 3.81%
■ Taxable Series 2016A-T financing rate = 3.45%
■ Blended financing rate = 3.80%
$7,710,000
Tulsa County Industrial Development
Multifamily Housing Revenue Bonds
(Pythian Manor, Inc. Project)
Series 2016
Standard & Poor’s Ratings
Series 2016A
“A-”
(Taxable) Series 2016A-T
“A-”
Stifel, Nicolaus & Company, Incorporated
Sole Manager
July 14, 2016
Source: Bloomberg. Thomson Reuters