America First Tax Exempt Investors said Thursday that it has financed approximately $95.8 million through a new long-term secured debt financing facility with Freddie Mac.
The company said it utilized Freddie Mac's Tax-Exempt Bond Securitization (TEBS) program. The company said it will use $49.5 million of the proceeds to repay the entire outstanding balance due on the its secured term loan with Bank of America.
The TEBS Financing is a securitization of 13 of the firm's tax-exempt mortgage revenue bonds and essentially provides it with a long-term variable rate debt facility at interest rates that will reflect prevailing short-term tax-exempt rates.
The effective interest rate to be paid on the TEBS Financing is equal to the weekly Securities Industry and Financial Markets Association (SIFMA) floating index rate plus certain credit, facility, remarketing and servicing fees or facility fees.
The initial rate and fees add up to an interest rate of 2.15%, America First said.
The firm has also entered into three separate interest rate cap agreements that would limit the company exposure to increases in the SIFMA base rate to the interest rate caps strike rate of 3.0% per annum.
The cap rate plus the facility fees result in a maximum potential cost of borrowing on this financing of 4.9% per year.