Ladies and gentlemen, I would like to welcome everyone to the America First Multifamily Investors, L.P.'s NASDAQ ticker symbol ATAX Fourth Quarter of 2020 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode.

After management presents its overview of Q4 2020 you will be invited to participate in a question-and-answer session. As a reminder, this conference call is being recorded. On behalf of ATAX and its management team, thank you and welcome to ATAX Fourth Quarter of 2020 Earnings Conference Call.

During the conference call, comments made regarding ATAX which are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause the actual future events of results to defer materially from these statements.

Such forward-looking statements are made pursuant to the Safe Harbor provision of the private securities litigation reform act of 1995. Forward-looking statements can be identified by the use of words like may, should, expect, plan, intend, focus, and other similar terms..

Thank you, and good afternoon everyone. Welcome to America First Multifamily Investors L.P.'s fourth quarter 2020 investor call. Thank you for joining. I will give an overview of our business and the markets and then Jesse Coury, our Chief Financial Officer will present the Partnership's financial results.

Following that, we look forward to taking your questions? I'm pleased to be with you today as ATAX's new CEO. I'm humbled by the Board's decision to offer me that role and I look forward to working with the rest of the management team to keep the partnership moving forward in these still challenging times.

For the fourth quarter of 2020, the partnership reported net income of $0.00 per Beneficial Unit Certificate or BUC, $0.06 of cash available for distribution per BUC, book value of $5.93 per BUC on $1.2 billion of assets and a leverage ratio as defined by ATAX of 67%.

The Partnership is current and in good standing with all of our lenders and leverage providers. In terms of the Partnership's investment portfolio, we have received no request for forbearance on our multifamily mortgage revenue bonds and all multifamily MRBs are current on principal and interest payments.

The collections rate at properties of service collateral for multifamily MRBs has averaged approximately 91% from October 2020 through January 2021. Physical occupancy averaged 94% for the portfolio as of December 31, 2020..

Thank you, Ken. For the fourth quarter of 2020 ATAX reported total revenues of approximately $13.5 million. Net income for Beneficial Unit Certificate or BUC basic and diluted of $0.00 and cash available for distribution or CAD of $0.06 per BUC.

The net income of $0.00 per BUC for Q4 2020 is a result of net income from operations offset by a $2 million impairment of the proton center mortgage revenue bond, as a result of the borrowers declined operational results debt service shortfalls and the borrower's bankruptcy filing in December 2020..

Operator, I believe we have a few questions in the queue..

Yes, sir. I apologize about that. I was on mute. We do have our first question from the line of Jason Stewart from JonesTrading. Your line is open. You may ask your question, please..

Great, thanks. Ken, congratulations on the promotion and getting settled into the new role. I wanted to start with maybe your view on a topic that's probably on everybody's minds, interest rates and the volatility there.

If you could give us some thoughts on how that impacts the municipal bond sector and maybe in terms of spreads, and maybe take it to the next step and where the progress is in terms of investing in higher margin loans, and the senior living space et cetera, down those lines, it will be helpful..

Sure, thanks Jason, happy to address those points for you. The first thing with regard to rates and I guess today is a good day to talk about that, given what we've seen happening in the markets is, the focus that we've had recently on the new origination side, as both Jesse and I have mentioned today is on the shorter term construction financing.

One of the things that we like about that business is that it's shorter tenure so that we have less duration risk, less risks of volatility, and price changes from a change in interest rates. And we also like the fact that we've got floating rate assets and floating rate liabilities.

The loans that we're making to the underlying project sponsors are floating rate in nature, and the tender option bond funding vehicles that we've put into place in order to fund those positions are floating rate as well.

So between that nice match of asset and liability, and the fact that at least in terms of the short term or the shorter end of the interest rate curve, we've seen less volatility there in the first couple months of this year, very little movement.

And so for or one month or three month LIBOR, I think bodes well for the portfolio and the new assets that we're putting on the books. Where I think, things may be a little more challenging going forward is with our traditional multifamily MRB business.

We got a great boost at the end of 2020 with the COVID relief bill that included the right sizing of the low income housing tax credit factor on tax exempt bond deals.

But with this movement in rates that we've seen over the past couple of months, it's certainly going to start potentially have an impact on the underwriting of those projects, the interest rates that they can support, and what demand is going to look like going forward.

So certainly something from an origination perspective, we're going to have to keep our eye on.

Finally, to your question about some of the higher yielding assets, we've talked on calls in the past about moving into the senior living and skilled nursing sectors where Greystone has a long history and track record of being a lender and being an owner and operator and kind of drafting off of that experience that previously didn't exist in the organization.

We are evaluating those opportunities. I don't think we see the same pressure from higher rates there, since those are higher yielding assets, which typically come at a healthy spread already to overall rate levels.

So I wouldn't expect to see a modestly rising interest rate environment have a significant impact on the opportunities there and what we could put to work..

Got it, okay. And then, if we just pull back up, and take a step back in terms of the credit performance, I know there were one or two assets that have had issues, but more broadly speaking, the portfolio has performed really well. Two questions there.

One, obviously, I think you feel like you're properly provisioned at this point for any issues you've identified, but then two, are we far enough through the cycle where you feel like you have some line of sight to the other side, where you could start talking about a dividend increase again at some point in the near future?.

I think at this point in time Jason we've been very pleased by the performance of our multifamily and our MRB portfolio.

For us to be sitting here today and in February of 2021, having lived through the past almost a year at this point in time with a pandemic, to say that over that time horizon we've had no requests for forbearance, and that we've averaged the occupancy and the collection rates that we have at the underlying assets, I think is a great thing and I'm very thankful that that's the position that we're in.

In terms of moving forward at this point in time, the Board is the determinant of the distributions to the BUC holders. They base that on a disciplined evaluation of the Partnership's cash available for distribution and other factors that they deem relevant.

As it always has done in the past, the general partner in consultation with management always continually evaluates the factors that go into the BUC holder distribution decisions, consistent with the long term best interests of the BUC holders and the Partnerships. So I think that approach is going to continue.

We, as I said, have been pleased by the performance of the portfolio.

And I think as we continue to see some of these new measures come into place from the federal and the state governments as this latest round of COVID relief works its way through Congress, I think the Board will look at and evaluate all of those factors and come to a conclusion with regard to the distribution..

Great, thanks for taking the questions and congrats once again on the new role..

Thank you, Jason..

Thank you, sir. We do have another question from the line as Jeff Neal of Merrill Lynch. Your line is open. You may ask your question..

Thank you.

Just a couple of points of clarification on some things you mentioned, just reiterating book value at 12/31 is $5.93 a share approximately?.

That's correct, Jeff..

And second question, you mentioned the Vantage product and that, over the years, six properties have been sold, the amount was $27 million, was that $27 million in gains or $27 million in total proceeds?.

That is $27 million in gains. It does not include any return of our original investment..

Okay. So that's been a very profitable area for you.

Do you foresee over the next 12 to 18 months as some of these projects are completed the opportunity for sales of the Vantage related investments to accelerate or is that something you're not prepared to comment on yet?.

Jeff, we really can't give you much direct guidance on that. ATAX is the investor or the minority member in those individual project ownership entities..

Okay..

Those decisions are made by Vantage who's the managing member. I think we do have a track record at this point in time in terms of the strategy or the investment philosophy that's been followed here in terms of identification, completion of construction, lease-up and stabilization and then sale.

And I don't expect anything fundamental to change in that process or that strategy at this point in time.

But in terms of the individual project level decisions about when do we list a project for sale, depending on its underlying performance, that's really driven by Vantage, and I can't give you any more definitive color at this point in time in terms of which projects are potentially going to be in that situation or what the potential timing might be..

Understood.

Could you restate the number of current Vantage projects, just enough, just the sheer number?.

The sheer number is there are 12 individual investments, 7 of which where construction is 100% complete and then 5 of which where construction or planning is still underway..

And those were the ones that you listed in Texas, Nebraska, South Carolina, et cetera, correct?.

That's correct. Yes, Jeff..

Okay. And last question, if I may, several times you mentioned your non-operating line of credit.

What is the potential availability, probably subject to covenants, but what is the availability on that line?.

Yes, we have a up to $50 million non-operating line of credit, which we also occasionally refer to as our acquisition line of credit, which allows us to finance the initial purchase of mortgage revenue bond investments or other investments under the term of our credit agreement.

So that is really intended to be a staging area, where we can take down new investments and then give us time to arrange trust financings either through a TEBS execution with Freddie Mac or a tender option bond financing agreement through Mizuho or a similar lender..

Understood, so that's actually pretty sizable relative to most MRB opportunities?.

That is correct. We believe the $50 million level provides us flexibility to take down either a large mortgage revenue bond if the opportunity presents itself or multiple smaller mortgage revenue bonds as needed..

Yes, as you described. Thank you very much for that clarification. I appreciate it..

Thank you. We have another question from the line of Jonathan from America First Debt. Your line is open..

Actually I'm a unit holder. Congratulations, the new CEO.

I think this question has been alluded to if not outright answered, have the student loan or the student housing facilities, has that been fully reserved right now or where are you in terms of your reserve?.

Are you referring to the student housing MRB on the Live 929 project?.

Yes, yes. .

Jesse, do you want to address that question please?.

Yes, we've reserved approximately 8% of the principal or carrying value of that investment. That is based on our evaluation of the underlying bond. And we believe is supported by the market price of those bonds, as well as the expected cash flows offered the asset.

So we've reserved a portion based on what we've seen operation wise so far, and what we anticipate for the future and continually….

And also regarding the other commercial loan, the one that filed Chapter 11, is that fully reserved also? Is that your best guess as to what the recovery really will be once the bankruptcy procedure has been completed?.

That is our current estimate of yes, what we believe to be recoverable. Right now we have a carrying value or a net value on that of approximately $6 million or 60% of our par value..

Okay. Well, it's always the problem loans that can cause you an issue, but you guys did tremendous work on the balance of the portfolio looking for better things in 2021. Keep up the good work. Thank you very much. Bye-bye..

Thank you, sir. We have another question from the line of Jim Mark from it's an Individual Investor. Your line is open. You may ask your question, please..

Hi, Ken. I have a question for you? I have an elderly friend that depends on the dividend. What would you say to reassure her about the dividend and the future of the company in a simplified answer? Thank you..

Jim, as we've indicated before, and as we do in every quarter, the general partner and management continually assess the factors that go into distribution decisions and as we expect that this disciplined evaluation process would continue for future periods as it has in the past.

I'm not sure there's really any color beyond that, that I can give you or any reassurances that I can give you, but I think you're addressing that consistent strategy in terms of the Board's decision making process in determining the level of distribution, it is going to be handled the same way that it always has been..

Okay, thank you very much. I appreciate it..

There are no further questions at this time. I would like to turn back the call to Mr. Rogozinski for closing remarks.

Sir?.

Thank you very much. We appreciate everyone showing their interest today by participating in the call and we look forward to our continued communication with you in the future. Thank you very much..

Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you for participating. You have a good day. Thank you, presenters..