UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): March 27, 1997
ASSET INVESTORS CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 1-9360 84-1038736
(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification No.)
3600 South Yosemite Street, Suite 350 80237
Denver, Colorado (Zip Code)
(Address of principal executive offices)
(303) 793-2703
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address,
if changed since last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 27, 1997, Asset Investors Corporation (the "Registrant"),
completed the previously announced resecuritization of its non-agency MBS bonds.
The transaction was accomplished by the Registrant's contribution of the bonds
to an owner trust in which it retained an equity interest. In a private
placement, the trust then sold for $70,795,000 in cash, debt securities
representing senior interests in the trust's assets to Bear Stearns & Co., as
the initial purchaser for resale pursuant to Rule 144A under the Securities Act
of 1933. Following the transaction, the Registrant's equity interest has no
carrying value and represents the first-loss class of the portfolio, providing
credit support for the senior debt securities. The debt securities sold are
without recourse to the Registrant.
In connection with the transaction, the Registrant incurred
approximately $1,050,000 in related costs and up to approximately $2,072,000 of
management fees, resulting in net proceeds of approximately $67,673,000. The
portfolio of non-agency MBS bonds has been classified as available-for-sale and
included $6,000,000 of unrealized holding gains at December 31, 1996. Upon
completion of the transaction, a net gain of approximately $7,360,000 and
related management fee expense of approximately $2,072,000 will be recognized by
the Registrant in the first quarter of 1997.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The unaudited pro-forma condensed consolidated financial information of
the Registrant as of December 31, 1996, and for the year then ended is presented
below. The pro-forma condensed consolidated balance sheet of the Registrant as
of December 31, 1996, is presented as if the March 27, 1997, transaction had
occurred on December 31, 1996. The pro-forma adjustments assume that $3,000,000
of the net proceeds are used to repay short-term borrowings and the remaining
net proceeds of approximately $64,673,000 are invested in short-term
investments.
The pro-forma condensed consolidated statement of income for the year
ended December 31, 1996, is presented as if the March 27, 1997, transaction had
occurred on January 1, 1996. The Registrant plans to reinvest the proceeds from
the transaction in equity interests in real estate, but as of the date of this
filing, no investments have been made. Additionally, future earnings from the
retained equity interest are not considered probable because the equity interest
constitutes the first-loss class which is dependent upon the credit losses on
the underlying mortgage collateral. Accordingly, for purposes of presenting the
pro-forma condensed consolidated statement of income for the year ended December
31, 1996, the net proceeds from the transaction are assumed to be held in
short-term investments earning 5% per annum.
<PAGE>
ASSET INVESTORS CORPORATION AND SUBSIDIARIES
PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands, except per share data)
<TABLE>
<CAPTION>
As Previously Pro-Forma Pro-Forma
Reported Adjustments Results
------------------------------------------------------
Revenues (unaudited)
<S> <C> <C> <C>
Non-agency MBS bonds $ 11,513 $ (11,513) $ --
Equity in earnings of Commercial Assets 1,875 -- 1,875
Other income and expenses, net 136 3,329 3,465
---------- ----------- ----------
Total revenues 13,524 (8,184) 5,340
---------- ----------- ----------
Expenses
Management fees 1,793 (197) 1,596
General and administrative 1,145 (82) 1,063
Elimination of DERs 825 -- 825
Interest expense 88 (88) --
---------- ----------- ----------
Total expenses 3,851 (367) 3,484
---------- ----------- ----------
Net income before gain on sale of non-agency MBS bonds 9,673 (7,817) 1,856
---------- ----------- ----------
Gain on sale of non-agency MBS bonds -- 7,360 7,360
---------- ----------- ----------
Net income $ 9,673 $ (457) $ 9,216
========== =========== ==========
Net income per share $ .39 $ (.02) $ .37
========== =========== ==========
Weighted-average shares outstanding 24,595 24,595 24,595
</TABLE>
<PAGE>
ASSET INVESTORS CORPORATION AND SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(Amounts in thousands)
<TABLE>
<CAPTION>
As Previously Pro-Forma Pro-Forma
Reported Adjustments Results
----------------- ---------------- -----------------
Assets (unaudited)
<S> <C> <C> <C>
Cash and cash equivalents $ 417 $ 64,673 $ 65,090
Non-agency MBS Bonds 68,079 (68,079) --
Investment in Commercial Assets 19,361 -- 19,361
Other assets, net 2,487 (1,341) 1,146
-------- -------- --------
Total Assets $ 90,344 $ (4,747) $ 85,597
======== ======== ========
Liabilities
Accounts payable and accrued liabilities $ 454 $ -- $ 454
Management fees payable 525 -- 525
Short-term borrowings 3,000 (3,000) --
-------- -------- --------
Total Liabilities 3,979 (3,000) 979
-------- -------- --------
Stockholders' Equity
Common Stock, par value $.01 per share, 50,000,000
shares authorized and 24,840,140 shares issued
and outstanding 248 -- 248
Additional paid-in capital 228,753 -- 228,753
Cumulative dividends (238,367) -- (238,367)
Cumulative net income 90,638 4,253 94,891
-------- -------- --------
Dividends in excess of net income (147,729) 4,253 (143,476)
Unrealized holding gains (losses) on debt securities 5,093 (6,000) (907) (a)
-------- -------- --------
Total Stockholders' Equity 86,365 (1,747) 84,618
-------- -------- --------
Total Liabilities and Stockholders' Equity $ 90,344 $ (4,747) $ 85,597
======== ======== ========
<FN>
- ---------------------
(a) Represents the Registrant's proportionate share of the unrealized holding
losses on the commercial mortgage loan securitizations of Commercial
Assets.
</FN>
</TABLE>
<PAGE>
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.
ASSET INVESTORS CORPORATION
Date: April 10, 1997
By: /s/Kevin J. Nystrom
-------------------------
Kevin J. Nystrom
Chief Financial Officer
