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 1, 1997
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 2. Acquisition and Disposition of Assets
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On October 1, 1997, as part of the settlement of class action litigation
known as Prudential Securities Inc. Limited Partnership Litigation, MDL No.
1005, Summit Tax Exempt Bond Fund, L.P., Summit Tax Exempt II L.P., and Summit
Tax Exempt III, L.P., three limited partnerships (the "Partnerships")
co-sponsored by Prudential Bache Properties, Inc. ("PBP") and affiliates of
Related Capital Company ("RCC"), consolidated (the "Consolidation") to form
Charter Municipal Mortgage Acceptance Company, a Delaware Business Trust
("CharterMac") which will specialize in the financing of tax-exempt multifamily
housing. Pursuant to the Consolidation, CharterMac issued shares to all partners
in each of the Partnerships and commenced trading on the American Stock Exchange
on October 1, 1997, under the stock symbol "CHC". There are 20,586,383 shares
currently outstanding. The terms of the consolidation are more fully described
in CharterMac's Solicitation Statement dated June 18, 1997 which was previously
distributed to all partners of the Partnerships. (the "Solicitation Statement")
CharterMac is governed by a board of five managing trustees, three of whom
are affiliated with RCC, and CharterMac has engaged Related Charter LP, an
affiliate of RCC, (the "Manager") to manage its day to day affairs. The Manager
will provide to CharterMac substantially the same services that were provided to
the Partnerships by the general partners. The Manager will also serve as the
general partner of CharterMac for tax purposes. As part of the Consolidation,
the Manager acquired PBP's general partner interest in each of the Partnerships,
and contributed one half of such interest back to the Partnerships prior to the
Consolidation.
For financial accounting and reporting purposes, the Consolidation is
being accounted for using the purchase method of accounting. Under this method,
the Partnership with the investor group receiving the largest ownership in
CharterMac, in this case Summit Tax Exempt II L.P., is deemed to be the
acquirer. As the surviving entity for accounting purposes, Summit Tax Exempt II
L.P.'s assets and liabilities will be recorded by CharterMac at their historical
cost, with the assets and liabilities of the other Partnerships recorded at
their estimated fair values, using the adjusted net asset value (the "Net Asset
Value") for each Partnership as set forth in the Solicitation Statement.
CharterMac is an infinite life entity which may issue additional debt and
equity securities. CharterMac will originate, acquire and hold for investment,
tax exempt bonds, the proceeds of which will finance and refinance the
development and ownership of multifamily housing on a national basis. CharterMac
owns investments in 33 tax exempt bonds formerly held by the Partnerships and
has a Net Asset Value of approximately $308.8 million, or $14.95 a share.
CharterMac currently has outstanding debt of 6.5% of total Net Asset Value and
may incur leverage up to 50% of its total market value (as defined in the
Solicitation Statement). CharterMac is designed to provide quarterly tax-exempt
distributions to shareholders based upon the amount of cash available for
distribution. The distributions are expected to commence after the end of the
first fiscal quarter after October 1, 1997. The initial level of distribution
has not yet been determined.
CharterMac is widely held, with no investor holding more than two percent
of outstanding shares.
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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 October 1, 1997 Press Release "Related Capital Launches Tax-Exempt
Bond Trust to Finance Development of Multifamily Housing"
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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/ Alan P. Hirmes
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Alan P. Hirmes
Managing Trustee
October 14, 1997
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Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Eric Starkman/Elisabeth Philippe/
Scott Sunshine
Morgan-Walke Associates, Inc.
(212) 850-5600
RELATED CAPITAL LAUNCHES TAX-EXEMPT BOND TRUST
TO FINANCE DEVELOPMENT OF MULTIFAMILY HOUSING
CHARTERMAC'S SPEEDY UNDERWRITING PROCESS
TO PROVIDE LOAN COMMITMENTS WITHIN 30 DAYS
Quarterly Tax-Exempt Distributions To Shareholders
NEW YORK, NY, October 1, 1997 -- Related Capital Company, a leading
national real estate financial firm, today announced the launch of Charter
Municipal Mortgage Acceptance Company ("CharterMac"), a publicly-traded company
specializing in the financing of tax-exempt multifamily housing. CharterMac's
shares are listed on the American Stock Exchange under the stock symbol
"CHC.WI".
CharterMac, a consolidation of Summit Tax Exempt Bond Fund (AMEX:SUA) and
two other partnerships previously sponsored by affiliates of Related Capital, is
organized as a Delaware Business Trust. The Company will originate and acquire
tax-exempt bonds, the proceeds of which will be held to finance and refinance
the development and ownership of multifamily housing on a national basis.
(more)
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2
As a result of the consolidation, shares of Summit Tax Exempt Bond Fund
have ceased trading.
"CharterMac is well positioned to become the premier financing vehicle for
tax-exempt multifamily housing," said J. Michael Fried, President of Related
Capital. "In addition to providing developers with loan commitments in as little
as 30 days, CharterMac's underwriting process will not require the involvement
of investment bankers, rating agencies or credit enhancers. The fund will also
be an aggressive buyer of tax-exempt bonds, and we expect to significantly grow
its portfolio over the next two years."
CharterMac's portfolio is comprised of 33 tax-exempt bonds with a net
asset value of $308.8 million, or $14.95 a share. The fund, with outstanding
debt of 6.5% of total capitalization, will be conservatively managed and may not
incur leverage in excess of 50% of its asset value.
CharterMac is designed to provide quarterly tax-exempt distributions to
shareholders. The amount of quarterly distributions will be based upon the
amount of cash available for distribution (CAD), after giving adequate
consideration to the fund's working capital needs. Although the initial level of
distributions have not yet been determined, the fund's pro forma statements
indicate sufficient CAD to set initial quarterly distributions levels at 22 to
25 cents per share. However, Mr. Fried emphasized that there is no guarantee
that actual CAD levels will be sufficient to make such distributions.
CharterMac is managed by a board of five trustees, three of whom are
affiliated with Related Capital. The fund is widely held, with no investor
holding more than two percent of outstanding shares.
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3
Related Capital is a nationwide, fully integrated real estate financial
services firm. Since 1972, Related and its affiliates have raised more than 3
billion in equity from more than 100,000 investors to acquire a portfolio of
more than 800 properties, bonds and mortgages valued at a cost of $7 billion.
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 risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements, including without
limitation those set forth in CharterMac's Solicitation Statement dated June
18th 1997. Such forward-looking statements speak only as of the date of this
press release. The Company expressly disclaims any obligation or undertaking to
release publicly and updates or revisions to any forward-looking statements
contained herin to reflect any change in the Company's expectations with regard
therto or change in events, conditions or circumstances on which any such
statement is based.
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