Greystone Housing Impact Investors LP(GHI) - 2020 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - As of March 31, 2020, total assets were approximately $978 million, down from approximately $1.03 billion as of December 31, 2019 [16] - Total revenues for Q1 2020 were approximately $13.7 million, with net income per beneficial unit certificate (BUC) of $0.04 and cash available for distribution (CAD) of $0.05 per BUC [34] - The net book value per BUC as of March 31 was $5.38, down approximately 4% from $5.61 at December 31, 2019 [35] Business Line Data and Key Metrics Changes - Mortgage revenue bonds totaled approximately $774 million, representing 78% of total assets, up from 75% as of December 31, 2019 [17] - The company owns two multifamily properties with a total net carrying value of approximately $61 million, primarily serving college students [20] - Investments in unconsolidated entities related to 10 multifamily market rate projects had a carrying value of approximately $98.6 million [21] Market Data and Key Metrics Changes - During the two weeks ended March 26, 2020, investors withdrew almost $26 billion from municipal bond mutual funds, leading to unprecedented redemption activity [11] - High-grade municipal bond yields gapped almost 200 basis points during a nine trading day period due to a lack of buyers for longer-term bonds [12] - By early April, liquidity was restored in the municipal bond market, with approximately 75% of the yield gap being retraced [13] Company Strategy and Development Direction - The company is focused on monitoring its investment portfolio for potential impacts from the COVID-19 pandemic and is developing plans to assist sponsors experiencing hardship [14] - New Vantage originations have been paused, but the company is ready to pursue opportunities once market clarity is achieved [45] - The company aims to maintain transparency with investors regarding the effects of COVID-19 on its portfolio and future guidance [39] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the uncertainty caused by the COVID-19 pandemic and its impact on the economy, emphasizing the need for ongoing monitoring [7][41] - The management noted that collections for April were at 94%, and they are currently monitoring May's performance [61] - The management expressed that the depth and duration of COVID-19's effects are still to be determined, making it challenging to provide specific guidance [40] Other Important Information - The company terminated all debt financing arrangements with Deutsche Bank, totaling approximately $51.8 million, providing more flexibility in managing liquidity [27] - The company entered into new Tender Option Bond trust financing arrangements with Mizuho Capital Markets, totaling $55.4 million at lower interest rates [28] - The company has not received any forbearance requests from mortgage revenue bond borrowers as of the call date [52] Q&A Session Summary Question: Historical comparison for current credit evolution - Management acknowledged the unprecedented nature of the current situation and noted that collections were at 94% for the first quarter [39] Question: Update on mortgage revenue bond business and asset yields - Management indicated that the market has stabilized and returns are back to pre-COVID levels, with a steepening yield curve providing some advantages [43] Question: Impact of turmoil on Vantage projects - Management stated that new Vantage originations are on hold until there is more clarity in the market regarding lease-up and rental growth [45] Question: Freddie Mac exposure and forbearance - Management confirmed that 72% of the mortgage revenue bonds are financed through Freddie Mac TEBS facilities, and no forbearance requests have been received to date [52] Question: Cash available for distribution (CAD) and future dividends - Management indicated that asset sales may be necessary to supplement CAD to cover distributions, and guidance will be provided in the coming weeks [60] Question: Current occupancy rates - Management confirmed that the 94% occupancy rate for April is being monitored for May, which will influence future cash management decisions [61] Question: Return of capital in distributions - Management stated that the decision regarding the inclusion of return of capital in future distributions is yet to be determined [68]