SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): October 2, 1997
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Charter Municipal Mortgage Acceptance Company
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(Exact Name of Registrant as Specified in Charter)
Delaware
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(State or other Jurisdiction of Incorporation)
1-13237 13-3949418
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(Commission File Number) (IRS Employer Identification Number)
625 Madison Avenue, New York, NY 10022
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (212) 421-5333
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Not Applicable
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(Former Name or Former Address, if Changed Since
Last Report
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Item 5. Other Events
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On October 2, 1997, Related Charter LP (the "Manager") a subsidiary of
Charter Municipal Mortgage Acceptance Company ("CharterMac") signed a
conditional commitment letter with Capital Markets Assurance Corporation
(CapMAC) for up to a $150,000,000 revolving credit enhancement facility (the
"Facility") which will enable a subsidiary of CharterMac to issue low cost AAA
rated certificates (the "Low Floater Certificates") that will receive tax-exempt
distributions payable based upon a weekly remarketing by a remarketing agent
(the "Remarketing Agent"). Goldman, Sachs & Co. has been selected to act as the
Remarketing Agent for the Low Floater Certificates. Leverage under the proposed
Facility will not exceed 50% of CharterMac's Total Market Value as of the date
incurred.
CharterMac's cost of capital with the CapMAC Facility in place will be
signifigantly lower than CharterMac's current financing cost and the expected
interest rates on new First Mortgage Bonds (the "FMB's") which CharterMac
expects to acquire with the proceeds of the facility. The indicated current
range of Stated Base Interest on the 31 FMBs presently held in CharterMac's
portfolio is 4.8% to 9%, and each provides for contingent interest in amounts
ranging from 25%-65% of net cash flow or net sale or refinancing proceeds up to
a simple annual rate of 11-16% over the term of the FMB's. Proceeds from the
Facility will be used to retire higher cost debt which currently has an interest
rate of 9.58% and to fund acquisitions of new FMBs. New FMBs are expected to
have interest rates of at least 7.25% .
The Facility is expected to close in December although no assurance can be
given regarding the exact timing of such events. Certain items in this 8-K may
constitute forward-looking statements within the meaning of the Private
Litigation Reform Act of 1995 and as such may involve known and unknown risk,
uncertainties and to other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performances, or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements speak only as of the
date of this 8-K CharterMac expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in CharterMac's expectations with regard
thereto or change in events, conditions or circumstances on which any such
statement is based.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a). Financial Statements
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Not Applicable
(b). Pro Forma Financial Information
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Not Applicable
(c). Exhibits
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99.1 November 6, 1997 Press Release "Charter Municipal Mortgage
Acceptance Company Signs Commitment Letter With Capital Markets
Assurance Corporation For Up To $150,000,000 Revolving Credit
Enhancement Facility."
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Charter Municipal Mortgage Acceptance
Company
(Registrant)
BY: /s/ Stuart J. Boesky
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Stuart J. Boesky
Managing Trustee
November 6, 1997
Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT: Stuart J. Boesky
Charter Municipal Mortgage
Acceptance Company
(800) 831-4826
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY SIGNS
COMMITMENT LETTER WITH CAPITAL MARKETS ASSURANCE
CORPORATION FOR UP TO $150,000,000 REVOLVING CREDIT
ENHANCEMENT FACILITY
GOLDMAN, SACHS & CO. TO SERVE AS REMARKETING AGENT
FOR THE FACILITY
New York, NY November 6, 1997 -- The Manager of Charter Municipal Mortgage
Acceptance Company ("CharterMac"), a publicly traded company specializing in the
tax-exempt financing of multifamily housing properties, (AMEX:CHC) has signed a
commitment letter with Capital Markets Assurance Corporation ("CapMAC") for up
to a $150,000,000 revolving credit enhancement facility. The facility will allow
a subsidiary of CharterMac to issue low cost AAA rated certificates which
entitle the holders to receive tax-exempt distributions in an amount determined
by a weekly remarketing. Goldman, Sachs & Co. was selected to act as its
remarketing agent for the certificates.
CharterMac's cost of funds with the CapMAC facility in place will be
significantly lower than its current cost of funds. Proceeds from the CapMAC
facility will be used to retire CharterMac's higher cost debt and to fund
acquisitions of new first mortgage bonds which are expected to carry an interest
rate of at least 7.25%.
"The facility will enable CharterMac to significantly grow its portfolio
during 1998 and will aid in CharterMac's aggressive pursuit of tax-exempt bond
acquisition," said J. Michael Fried, Chairman and CEO of CharterMac. "Leverage
under the proposed facility will not exceed 50% of CharterMac's Total Market
Value as of the date incurred."
"Our new relationship with CapMAC represents a major first step in the
pursuit of CharterMac's long term business plan," said Stuart J. Boesky,
President and Chief Operating Officer of CharterMac. "Armed with a source of
inexpensive funding and a thorough understanding of the financing needs of
multifamily developers, CharterMac is now well positioned to grow. Looking
forward, we will concentrate our efforts in order to acquire bonds which are
accretive to CharterMac's earnings."
CapMAC is a leading provider of financial guarantee insurance for
structured securities, worldwide. CapMAC is rated triple-A by Moody's Investors
Service, Standard & Poor's Rating Services, Duff & Phelps Credit
Rating Co. and Nippon Investors Service.
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The Facility is expected to close in December although no assurance can be
given regarding the exact timing of such events. Certain items in this press
release may constitute forward-looking statements within the meaning of the
Private Litigation Reform Act of 1995 and as such may involve known and unknown
risk, uncertainties and to other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performances, or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements speak only as of the
date of this press release. CharterMac expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in CharterMac's expectations
with regard thereto or change in events, conditions or circumstances on which
any such statement is based.
