Municipal Mortgage & Equity, LLC (OTC: MMAB) (“MuniMae”
or “the Company,”)
announced today that the Company has decided to suspend its quarterly
dividend distribution.
The suspension of the Company’s dividend
distribution is being done to conserve capital to protect the long-term
prospects of the business, given the current dislocation of the credit
and debt capital markets and its impact on MuniMae’s
business. As previously disclosed, market conditions have had a direct
effect not only on some of MuniMae’s assets,
but also on financial institutions and other entities with which MuniMae
transacts business that has affected their willingness to participate in
the Company’s activities as equity investors,
lenders or otherwise. The combination of reduced investor interest and
reduced liquidity resulting from these circumstances has led the Company
to significantly curtail its business activities. MuniMae continues,
however, to invest in and operate certain businesses including
origination of loans for sale to Fannie Mae and Freddie Mac, activities
related to renewable energy generation and certain new business
initiatives.
Michael L. Falcone, Chief Executive Officer stated, “Considering
the extremely challenging and unprecedented economic environment, we
felt that suspending the dividend was in the best interests of our
shareholders and the Company. We will continue to restrict our business
activities and conserve our resources until market conditions normalize.
MuniMae will review the dividend payout on a quarterly basis and take
the most prudent actions possible to ensure the strategic needs of the
Company are being met and that it is positioned to succeed when the
environment changes. Importantly, while we have been forced to curtail
certain activities, other businesses, such as our loan origination
business with Fannie Mae and Freddie Mac has grown.”
Update First Quarter 2008 Production
First quarter 2008 production was $432 million, compared to $738 million
in the prior year period, due primarily to the impact of the credit and
debt capital markets on our businesses as described above. Production in
MMA Financial, the Company’s affordable
housing business and one of the businesses in which activity has been
significantly curtailed, included approximately $53 million in tax
credit equity placements, compared to $82 million in the prior year
period, approximately $2 million in construction loan originations,
compared with $12 million in the prior year period, and $6 million of
tax exempt bond originations, compared with $17 million in the prior
year period. MMA Financial did however post $60 million in permanent
loan originations, compared with $11 million in the prior year period,
driven by an increase in bonds and loans originated primarily for Fannie
Mae and Freddie Mac. MMA Realty Capital production included
approximately $199 million in Fannie Mae, Freddie Mac, and other agency
originations, and approximately $64 million in non-agency originations,
compared to $101 million and $222 million, respectively, in the prior
year period. Production in the Company’s MMA
Renewable Ventures unit was $49 million, compared to $160 million in the
2007 period. However, the 2007 first quarter included the Company’s
contract with the United States Government and others to build the
largest solar photovoltaic system in the United States on Nellis Air
Force base. Excluding the impact of this one contract, 2007 first
quarter production in MMA Renewable Ventures would have been $29 million.
“While we typically experience lower
production in our first quarter, these results reflect the extremely
difficult operating environment that the Company is operating in,”
continued Michael L. Falcone. “We are working
to clearly address each challenge to the business that the market is
presenting to us and are pleased that certain businesses are showing
strength and are growing. We have carefully allocated additional capital
in these areas to facilitate growth and are pleased to see the return on
our investment.”
Additionally, the Company said that the audit of the 2007 financial
statements of TE Bond Subsidiary, LLC and its subsidiaries, of which the
Company owns all the common shares, has been completed. Our common
shareholders equity in TE Bond Sub as of December 31, 2007 was $356
million, an increase of $27 million over the prior year. The December
31, 2007 common shareholders equity does not reflect the effects of the
disruption in the municipal bond market in 2008, which adversely
impacted the value of TE Bond Sub common shareholders equity by
approximately $28 million as of March 31, 2008.
The Company is also filing today with the Securities and Exchange
Commission a Form 8-K announcing the extension of a credit agreement.
About MuniMae
MuniMae and its subsidiaries arrange debt and equity financing for
developers and owners of real estate and clean energy projects. The
Company also provides investment management and advisory services for
institutional investors. Assets under management exceed $19 billion
including investments in approximately 3,000 multifamily properties,
containing more than 323,000 units in 49 states, the District of
Columbia, Puerto Rico and the U.S. Virgin Islands.
MuniMae is organized as a limited liability company, which allows it to
combine the limited liability, governance and management characteristics
of a corporation with the pass-through features of a partnership. As a
result, the tax-exempt income derived from certain investments remains
tax-exempt when passed through to shareholders. MuniMae also conducts
activities through wholly owned taxable corporate subsidiaries.
Distributions to shareholders are normally declared quarterly.
Statements in this press release or on MuniMae's website that
are not historical fact may be deemed forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Examples of forward looking statements include such matters as future
Board actions concerning our dividend. Although the Company believes the
expectations reflected in any forward-looking statements are based on
reasonable assumptions, the Company can give no assurance that its
expectations will be attained. The Company undertakes no obligation to
revise or update publicly any forward-looking statements contained
herein for any reason. Factors that could cause actual results to differ
materially from the Company's expectations include completion of the
audit of our financial statements, completion of pending investments,
continued ability to originate new investments, the mix of business
between tax-exempt and taxable activities, the availability and cost of
capital for future investments, competition within the finance and real
estate industries, economic conditions, loss experience and other risks
detailed from time to time in the Company's SEC reports. This press
release does not constitute an offer to sell any securities of the
Company or any other entity.
MUNIMAE: INTEGRITY. INNOVATION. SERVICE.
www.MuniMae.com
|