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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
Date of Report (Date of earliest event reported): September 13, 2000
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Oxford Tax Exempt Fund II Limited Partnership
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(Exact name of registrant as specified in its charter)
Maryland 0-25600 52-1394232
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
7200 Wisconsin Avenue, Suite 1100, Bethesda, Maryland 20814
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(Address of principal executive offices)
(301) 654-3100
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Registrant's telephone number, including area code
N/A
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(Former name or former address, if changed since last report)
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OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
FORM 8-K
CURRENT REPORT
Item 2. Acquisition or Disposition of Assets.
On September 13, 2000, San Bruno-Oxford Limited Partnership
("San Bruno") completed a financing transaction with affiliates
of Merrill Lynch & Co., Inc. In connection with this financing
transaction, a Merrill Lynch affiliate acquired from Oxford Tax
Exempt Fund II Limited Partnership (the "Company" or "OTEF")
(AMEX: OTF) the $26.060 million of tax-exempt bonds held by OTEF
and secured by San Bruno's property. OTEF received a net
purchase price of par plus accrued but unpaid interest through
the date of payment for these bonds.
In addition, at closing of this financing, a Merrill Lynch
affiliate purchased a new promissory note issued by San Bruno in
the original principal amount of $8.8 million, a portion of the
proceeds of which was used to repay to OTEF in full all amounts
then due and owing by San Bruno under the terms of the Demand
Note. The Demand Note was issued by San Bruno in connection with
the November 1, 1999 remarketing of the tax-exempt bonds, with an
original principal amount of $8,833,577, and had an outstanding
principal balance including accrued but unpaid interest of
$8,678,103. The original principal balance of the Demand Note
represented all contingent interest and accrued but unpaid
interest due and owing with respect to the San Bruno bonds as of
the November 1, 1999 bond remarketing date.
With the completion of this transaction, OTEF received total
net proceeds of approximately $35.6 million, representing all
principal and interest due and owing by San Bruno with respect to
OTEF's investment. The managing general partners of San Bruno-
Oxford Limited Partnership and OTEF are affiliates.
For financial statement purposes, OTEF will report a gain of
approximately $15.2 million with respect to the San Bruno tax-
exempt bonds and $8.2 million with respect to the Demand Note.
The $8.2 million gain from the Demand Note will increase OTEF's
net book value in the same amount. For the near term, the
Company intends to retain the net proceeds from this transaction
for working capital purposes.
Item 7. Exhibits
Exhibit 1 Press Release dated September 14, 2000.
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OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
FORM 8-K
CURRENT REPORT
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.
Oxford Tax Exempt Fund II Limited Partnership
By: Oxford Tax Exempt Fund II
Corporation,
Managing General Partner of the
registrant
Date: September 18, 2000 By: /s/ Marc B. Abrams
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Marc B. Abrams,
Senior Vice President
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Exhibit 1
For Release 4:00 p.m. EDT
September 14, 2000
News Release
OXFORD TAX EXEMPT FUND INCREASES DIVIDEND AND CLOSES SAN BRUNO
TRANSACTION
September 14, 2000 EDT
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BETHESDA, MARYLAND-September 14, 2000 - Oxford Tax Exempt
Fund (AMEX: OTF) announced that the Board of Directors of its
managing general partner declared a 4.6% increase in the
distribution for the third quarter of 2000 from $0.54 per BAC to
$0.565 per BAC. This distribution also represents an increase of
approximately 8.7% over the distribution paid for the third
quarter of 1999. Third quarter distributions will be paid on
November 14, 2000 to holders of record as of September 30, 2000.
BACs will begin to trade "ex dividend" on September 28, 2000.
The Company also reported that it recently received
approximately $35.6 million from the sale at par plus all accrued
interest of the $26.06 million of tax-exempt bonds secured by the
San Bruno property and the related $8.6 million demand note the
Company received from the borrower in connection with the San
Bruno tax-exempt bond remarketing transaction that closed on
November 1, 1999. The $8.6 million demand note amount
represented all accrued but unpaid interest with respect to the
San Bruno bonds as of the November 1, 1999 bond remarketing date.
As a result of this sale, OTEF has now received amounts with
respect to its San Bruno investment equal to all principal and
interest owed under the original 1986 bonds and the 1999 demand
note. This sale concludes OTEF's investment in San Bruno.
For financial statement purposes, the Company will report a
gain of approximately $15.2 million with respect to the San Bruno
tax-exempt bonds and $8.2 million with respect to the San Bruno
demand note. The $8.2 million gain from the demand note will
increase OTEF's net book value in the same amount. For the near
term, the Company intends to retain the net proceeds from this
transaction for working capital purposes.
Based on yesterday's closing price of $26.375, the Company
is providing BAC holders with an annualized dividend yield of
approximately 8.6%. The taxable equivalent yield is
approximately 13.6%, assuming approximately 90% of the dividend
is exempt from federal income tax and a 39.6% marginal tax
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bracket. The Company has paid 60 consecutive quarterly dividends
since its inception in the fall of 1985, including the
distribution to be paid for the third quarter. Based on the
current quarterly dividend of $0.565 per BAC, the Company's
dividend payout ratio is approximately 86.5% of the net income
per BAC reported for the quarter ended June 30, 2000. At June
30, 2000, the fully diluted book value of the BACs was $36.50 per
BAC.
The Company's business objective is to provide shareholders
with high tax-exempt dividends, plus income growth from
investments in tax-exempt mortgage revenue bonds, and related debt
and equity investments, secured principally by garden apartment
communities located in major U.S. growth markets. The Company's
bond investments are generally structured to enable the Company to
participate in any growth in the net operating income and
appreciation of the underlying properties.
Questions regarding transfer of shares should be directed to
the Company's registrar and transfer agent at 1-800-368-5948.
Any other questions should be directed to the Company's Investor
Services group at 1-888-321-OTEF. Visit OTEF's website at
www.OTEF.com.
This press release contains statements, which are forward-
looking in nature and reflect management's current views with
respect to future events and financial performance. These
statements are subject to many uncertainties and risks and should
not be considered guarantees of future performance. Actual
results may vary materially from projected results based on a
number of factors, including the actual performance of the
properties pledged as collateral for the Company's portfolio,
general conditions in the local real estate markets in which the
properties are located and prevailing interest rates.
