Greystone Housing Impact Investors LP(US:GHI)2025-05-07 21:30Financial Data and Key Metrics Changes - The company reported GAAP net income of $3.3 million, or $0.11 per unit, for Q1 2025, significantly impacted by $3.9 million of non-cash unrealized losses on interest rate derivatives [11] - Cash available for distribution (CAD) was reported at $7.1 million, or $0.31 per unit [11] - The book value per unit decreased to $12.59, down $0.56 from December 31 [12] Business Line Data and Key Metrics Changes - The investment portfolio had no forbearance requests for multifamily mortgage revenue bonds, with all borrowers current on payments as of March 31, 2025 [7] - Physical occupancy for the stabilized mortgage revenue bond portfolio was at 89.5% [7] - The Vantage joint venture equity investments included five properties, with four completed and one under evaluation [8] Market Data and Key Metrics Changes - The U.S. Municipal bond market faced challenges, with investment-grade tax-exempt bonds being the worst-performing fixed income asset class in Q1 2025 [24] - The ten-year MMD was at 3.33% and the thirty-year MMD at 4.4% as of May 6, 2025, reflecting an increase from previous months [25] - The market ended Q1 2025 with the muni high-grade index generating a total return of negative 0.2% [28] Company Strategy and Development Direction - The company is focusing on new construction lending joint ventures, particularly with BlackRock, to fill the void left by commercial banks in affordable housing construction lending [29] - The company aims to deploy approximately $450 million of lending capacity within the next 12 to 18 months [40] Management's Comments on Operating Environment and Future Outlook - Management noted that uncertainty in the municipal bond market continues, influenced by tariffs and potential changes in federal funding programs [26][27] - The company has not observed significant impacts on its investments from recent legislative and regulatory changes [27] Other Important Information - The company reported unrestricted cash and cash equivalents of $51.4 million as of March 31, significantly up from $14.7 million at the end of the previous year [14] - The company successfully issued $20 million of Series B preferred units in March 2025 [22] Q&A Session Summary Question: Will proposed shifts from federal to state/local governments affect muni credit ratings and valuations? - Management indicated it is still early in the process and that discussions are ongoing regarding potential changes in funding allocations [33][35] Question: Have tariffs changed the outlook for the BlackRock JV? - Management stated that there have not been significant changes in pro formas from sponsors due to tariffs as of now [38][39] Question: Will gains on JV sales be more muted going forward? - Management noted that specific increases in insurance costs impacted the sale of the Tomball asset, but the Halodis asset did not experience the same issue [41][42] Question: How is the partner Vantage holding up given lower profitability? - Management emphasized that Vantage's business model includes developer fees, not solely reliant on capital gains, ensuring alignment of interests [46][47] Question: Can you provide a real-time update on gross ROEs in the MRB and GIL business? - Management indicated that the hedging program has stabilized floating rate funding costs, leading to consistent ROE expectations [50][52]