NEW YORK, May 1, 2019 /PRNewswire/ -- Westwood Capital, LLC today announced the closing last week of its private placement of $205,000,000 in Receivables Backed Notes issued by AFAH Finance, LLC, a special purpose financing subsidiary of one of the nation's largest syndicators of funds owning multifamily residential programs that qualify for the Low Income Housing Tax Credit (LIHTC) under section 42 of the U.S. Internal Revenue Code. The Notes are co-issued by another subsidiary of the sponsor and are backed by over $750 million in expected mezzanine receivables associated with fees and other future consideration contributed and payable to the issuer and co-issuer in connection with the ownership and sale of 762 LIHTC properties, located in 48 U.S. states and territories, owned by 73 limited partnership funds previously organized by the syndicator, as general partner thereof.
The notes have been rated A2 by Moody's Investors Service, Inc. as static cash flow commercial real estate backed financing CLO (CRE CLO) using "Moody's Approach to Rating SF CDOs" (March 2019). The notes bear interest at a fixed rate of 4.75% and have a legal final maturity in 2035, although they are expected to be fully paid substantially earlier on a cash flow pass-through basis. The completed offering marks the first time that syndicator interests in the equity of LIHTC properties have been used to back the issuance of structured securities. LIHTC properties are typically held by funds and other investors therein for 15 years, after which they are sold with accumulated equity in such properties distributed contractually.
Daniel Alpert, managing partner of Westwood Capital, stated, "This transaction represents a watershed in the history of the 33 year old Low Income Housing Tax Credit syndication industry. The LIHTC program has produced over 46,000 properties containing over 3 million housing units throughout the United States during its lifetime and has proven to be a success for all stakeholders, including residents, local governments, developers and syndicators. And this transaction – with its solid investment grade rating – demonstrates the substantial value of LIHTC properties in the real estate and capital markets. We are very pleased to have worked closely with our client to produce this result."
Westwood Capital, headquartered in New York, offers expertise in corporate finance, mergers and acquisitions, structured finance, project finance and restructuring on a global basis, with special emphasis on providing emerging growth and middle-market companies access to the capital and M&A markets.
Contact: Daniel Alpert
Westwood Capital, LLC
SOURCE Westwood Capital, LLC