SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
October 20, 1999
Date of Report (Date of earliest event reported)
MUNICIPAL MORTGAGE & EQUITY, LLC
(Exact Name of Registrant as Specified in its Charter)
Delaware 001-11981 52-1449733
(State or Other (Commission File Number) (IRS Employer Identification No.)
Jurisdiction of
Incorporation)
218 North Charles Street, Suite 500
Baltimore, Maryland 21201
(Address of Principal Executive Office) (Zip Code)
(410) 962-8044
(Registrant's telephone number, including area code)
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Item 2. Other Events.
(a) On October 20, 1999 Municipal Mortgage & Equity, LLC ("MuniMae")
consummated its acquisition of 100% of the capital stock of Midland
Financial Holdings, Inc. ("Midland"), a Florida corporation, from
Messrs. Robert Banks, Keith Gloeckl and Ray Mathis, for approximately
$45 million, subject to certain post-closing adjustments. Of this
amount, approximately $23 million in cash and approximately $12 million
in MuniMae common shares was paid at the closing of the transaction,
respectively, and $3.33 million in MuniMae common shares is payable
annually over a three year period if Midland meets certain performance
targets, including an annual contribution to Cash Available for
Distribution (CAD) of at least $6.0 million in year one, $6.25 million
in year two and $6.5 million in year three. MuniMae funded the $23
million up-front payment from its working capital.
Midland is a fully integrated real estate investment firm specializing
in providing debt and equity capital to the multifamily housing
industry, particularly in the area of affordable housing. Since 1977,
Midland has originated approximately $2.6 billion in financing for
multifamily housing. Midland currently has approximately $225 million
of assets, of which 98% represents construction loans, and
approximately $217 million of liabilities of which 98% represents
Notes Payable. Midland operates primarily in the following related
areas:
o Commercial Mortgage Banking. Midland provides construction and
permanent debt financing, mortgage servicing and asset management
services to the multifamily housing industry. Midland is a Fannie
Mae Deligated Underwriter and Servicer (DUS) lender and a Federal
Housing Administration (FHA) approved mortgagee.
<TABLE>
<CAPTION>
Midland's Portfolio (in 000's)
<S> <C>
Construction Loans Outstanding:
Construction loans for own account $ 85,212
Construction loans for which risk is indemnified
by a third party* $ 136,060
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Total Construction Loans Outstanding $ 221,272
=========
Permanent Loan Servicing Portfolio:
Permanent loans serviced for FNMA with
risk sharing $ 92,409
Permanent loans serviced for FNMA where risk is
indemnified by a third party* $ 168,000
Permanent loans serviced which do not have risk $ 246,305
---------
Total Permanent Loans Serviced $ 506,714
=========
* The Midland Affordable Housing Group Trust indemnifies Midland for
economic risks associated with approximately $136 million of
construction loans and approximately $168 million of permanent loans
serviced.
</TABLE>
o Equity Syndication and Asset Management. Midland syndicates equity
for investment in low income housing tax credits. Midland also
syndicates equity and originates debt for investment in
student/conventional housing, a unique and growing segment of the
multifamily housing industry. Midland currently manages
approximately $295 million of such equity.
o Pension Fund Advisory. Midland Advisory Services, Inc., a
registered investment advisor with the Securities and Exchange
Commission and a wholly-owned special purpose subsidiary of
Midland, provides advisory services to pension funds. Midland
currently manages approximately $259 million of pension fund
money.
o Ancillary Businesses - Real Estate Brokerage/Management and
Securities Dealer. Midland Realty Investment Corporation, a
wholly-owned special purpose subsidiary of Midland, acts as a
licensed real estate broker in the states of Florida, Michigan and
California. Midland Securities Corporation, a registered broker
dealer with the National Association of Securities Dealers and a
wholly-owned special purpose subsidiary of Midland, markets
syndications of equity for real estate investments and provides
securities broker dealer services.
Midland has over 100 employees. It is headquartered in Clearwater,
Florida, and has branch offices in Dallas, Texas, San Francisco,
California, Portland, Oregon and Detroit, Michigan.
With the consummation of this transaction, the combined companies have
approximately $1.7 billion of investments in real estate debt and
equity under asset management. The combined companies' portfolio of
assets under management is comprised as follows:
o $429 million of tax-exempt bonds for its own account, comprised of:
o $222 million of participating bonds; and
o $207 million of fixed rate bonds;
o $113 million of taxable mortgages for its own account; and
o $1.15 billion of assets under management for others, comprised of:
o $722 million of permanent loans;
o $136 million of construction loans; and
o $295 million of equity.
The combined company's property portfolio has:
o 557 properties
o 51,926 units
o 94% occupancy (as of 6/30/99)
o Geographic diversity - properties located in 45 states, the
District of Columbia and the U.S. Virgin Islands
The combined property portfolio is broken out as follows:
Own account
o 101 properties
o 20,835 units
o 94% occupancy (as of 6/30/99)
o Properties located in 22 states, the District of Columbia and the
U.S. Virgin Islands
Managed for others
o 456 properties
o 31,091 units
o 94% occupancy (as of 6/30/99)
o Properties located in 44 states
A copy of MuniMae's press release announcing the consummation of this
transactions is attached hereto as Exhibit 99.2.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Aquired.
The financial statements required by this item are not being included
in this initial report on Form 8-K MuniMae expects to file the
financial statements required by this item not later than 60 days from
date of this initial report.
(b) Pro-Forma Financial Information.
The pro-forma financial information required by this item is not being
included in this initial report on Form 8-K. MuniMae expects to file
the pro-forma financial information required by this item not later
than 60 days from the date of this initial report.
(c) Exhibits.
2.1 Stock Purchase and Contribution Agreement dated as of
September 30, 1999, by and among Municipal Mortgage & Equity, LLC,
and Robert J. Banks, Keith J. Gloeckl and Ray F. Mathis, filed
as an exhibit to MuniMae's Current Report on Form 8-K, filed
October 8, 1999, and incorporated by reference.
99.1 Press Release of Municipal Mortgage & Equity, LLC, dated
October 4, 1999, filed as an exhibit to MuniMae's Current Report
on Form 8-K, filed on October 8, 1999, and incorporated by
reference.
99.2 Press Release of Municipal Mortgage & Equity, LLC, dated October
20, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
MUNICIPAL MORTGAGE & EQUITY, LLC
By: /s/ Michael L. Falcone
Michael L. Falcone
President and Chief Operating Officer
Date: November 2, 1999
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EXHIBIT INDEX
Exhibit No. Exhibit
2.1 Stock Purchase and Contribution Agreement dated
as of September 30, 1999, by and among Municipal
Mortgage & Equity, LLC, and Robert J. Banks,
Keith J. Gloeckl and Ray F. Mathis, filed as an
exhibit to MuniMae's Current Report on Form 8-K,
filed October 8, 1999, and incorporated by reference.
99.1 Press Release of Municipal Mortgage & Equity, LLC,
dated October 4, 1999 filed as an exhibit to
MuniMae's Current Report on Form 8-K, filed on
October 8, 1999, and incorporated by reference.
99.2 Press Release of Municipal Mortgage & Equity, LLC,
dated October 20, 1999.
<PAGE>
PRESS RELEASE Contact: Derek K. Cole
Director, Investor Relations
FOR IMMEDIATE RELEASE (888) 788-3863
MuniMae Completes Acquisition of the Midland Companies
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Company Now Manages $1.7 Billion of Multifamily
Real Estate Debt & Equity Investments
BALTIMORE, MD, October 20, 1999 -- Municipal Mortgage & Equity, LLC (NYSE: MMA),
also known as MuniMae, announced today the closing of its $45 million
cash-and-stock acquisition of the Midland Companies ("Midland"), based in
Clearwater, Florida. Midland is a privately held Fannie Mae lender that manages
construction and permanent loans as well as equity investments on behalf of
pension fund investors. Midland also raises equity from corporations for
investments in the federal tax credit program.
Having completed this acquisition, MuniMae now manages $1.7 billion of
investments in multifamily real estate debt and equity. A portfolio of 557
multifamily housing communities, encompassing 51,926 apartment units in 45
states, the District of Columbia and the U.S. Virgin Islands secures the
investments.
MuniMae Chairman and CEO Mark K. Joseph, stated, "We are pleased to complete
this transaction which combines two companies into a national multifamily
organization with the experience and expanded resources to better serve our
clients, challenge our employees and deliver growing tax-exempt distributions to
our shareholders. We believe that this better prepares MuniMae to benefit from
opportunities we see in the multifamily finance marketplace."
MuniMae originates, services and asset manages investments in multifamily debt
and equity totaling $1.7 billion for its own account and for institutional
investors. For its own account, MuniMae primarily holds tax-exempt multifamily
housing bonds, backed by real estate valued at over $750 million. Of these
bonds, over one-half provide for MuniMae to participate in the appreciation of
the underlying apartments.
MuniMae is organized as a limited liability company, which makes it exempt from
tax at the corporate level and provides the benefit of corporate governance. In
addition, the Company passes through to its shareholders primarily tax-exempt
dividends that are generated by its municipal bond investments. Dividends to
shareholders are declared quarterly and paid in February, May, August and
November.
MUNIMAE: TAX-EXEMPT DIVIDENDS AND GROWTH THROUGH REAL ESTATE
www.munimae.com www.gomidland.com
