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): February 14, 1995
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SCA TAX EXEMPT FUND LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Delaware 0-15725 52-1449733
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
218 N. Charles Street, Suite 500, Baltimore, Maryland 21201
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 962-0595
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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.
On February 14, 1995, SCA Tax Exempt Fund Limited
Partnership, a Delaware limited partnership ("SCATEF" or the
"Fund"), consummated a financing transaction in which new capital was
raised through the offering of $67,700,000 in aggregate principal
amount of Multifamily Mortgage Revenue Bond Receipts, Series A-1
through A-11 (collectively, the "Receipts").
The financing transaction was carried out in four steps:
The Refunding. Eleven bonds that were owned by SCATEF, in
the aggregate principal amount of $126,590,000, were refunded by the
issuers of such bonds. All of these bonds had financed properties that
defaulted on their original debt obligation and are controlled by SCA
Successor, Inc. (The specific bonds are listed on Attachment A.)
As a result of the refundings, each of the original 11 bonds was
exchanged for a Series A Bond and a Series B Bond. Each issue of
Series B Bonds is subordinate to the related issue of Series A Bonds.
In addition, the maturity date for each of the 11 bonds was extended as
part of the refunding.
The Trust. SCATEF deposited each of the Series A Bonds, in
the aggregate principal amount of $67,700,000, and Series B Bonds, in
the aggregate principal amount of $58,890,000, with the SCA Tax
Exempt Trust (the "Trust") which was created to hold these assets. A
Certificate of Participation in the corpus and the income of the Trust
was issued representing interests in the two series of bonds. SCATEF
is the sole holder of the Certificate of Participation.
The Custody Agreement and New Investors. The Series A
Bonds were deposited by the Trust with NationsBank Trust Company,
N.A., as custodian (the "Custodian"). The Custodian executed and
delivered the Receipts, each of which evidences the undivided beneficial
ownership interest in a particular issue of Series A Bonds. The Series
A Bonds provide the collateral for the Receipts. In addition, the cash
stream from one additional bond owned by SCATEF has been pledged
as further security for the Receipts.
The Receipts are credit enhanced by Financial Security
Assurance Inc. and are rated AAA and Aaa by Standard and Poors and
Moody's, respectively. In addition, the transaction was structured so
that a guaranteed, preferred, fixed rate tax exempt return will be paid to
Receipt holders. A portion of this fixed rate obligation was swapped
for a floating rate of interest. An interest rate cap has been purchased
so that the interest rate exposure with respect to this floating rate of
interest is predictable and limited. The Receipts were marketed by CS
First Boston which acted as underwriter and placement agent to SCATEF in this
transaction.
Use of Proceeds from the Sale of the Receipts. In return for the
sale of Receipts, the Trust has received $67.7 million from the
Custodian. It is currently anticipated, that the proceeds from the sale
of the Receipts will be invested in MLP III Investment Limited
Partnership ("MLP III") which is anticipated to reinvest the net
proceeds from the sale of the Receipts in MLP II Acquisition Limited
Partnership ("MLP II"). SCATEF will be the General Partner of MLP
III and the limited partner is SCA Limited Partner Corporation. The
general partner of MLP II is MLP I LLC ("MLP I") and the limited
partner is MLP III. The members of MLP I are certain of the
borrowers under the Series A and Series B Bonds and Creekside
Village Limited Partnership.
It is the current intention of MLP II, its partners and affiliates to
use approximately $57 million of the net proceeds from the sale of the
Receipts to acquire, directly or indirectly, either additional mortgage
revenue bonds that finance multi-family properties or multi-family
properties, the cash stream from which will benefit BAC Holders
primarily in the form of additional tax exempt or tax deferred
distributions. The properties or bonds which will be purchased with the
net proceeds will be acquired at a price intended to assure a positive
spread between the cost of new capital and the return on the new
investments. These new investments would be existing real estate
projects that have operating histories or bonds associated therewith. It
is anticipated that approximately $11 million of the proceeds from the
sale of the Receipts will be used to finance transaction costs, reserves
and interest rate protection. SCATEF is considering other potential
uses of the proceeds.
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ATTACHMENT A
SCATEF Mortgage Revenue Refunding Bonds
Series A Bond Series B Bond
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Series I
Barkley Place $5,350,000 $3,480,000
The Montclair $8,500,000 $6,840,000
Newport Village $6,250,000 $4,175,000
Nicollet Ridge $7,925,000 $12,415,000
Steeplechase $12,650,000 $5,300,000
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Sub-Total $40,675,000 $32,210,000
Series II
Gilman Meadows $4,000,000 $2,875,000
Hamilton Chase $7,625,000 $6,250,000
Mallard Cove I $800,000 $1,670,000
Mallard Cove II $2,700,000 $3,750,000
The Meadows $3,000,000 $3,635,000
Whispering Lake $8,900,000 $8,500,000
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Sub-Total $27,025,000 $26,680,000
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TOTAL $67,700,000 $58,890,000
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Additional Property With Pledged Cash Stream
Bond & Working Capital Loan
Series I
Creekside $11,985,000
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SIGNATURE
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.
SCA TAX EXEMPT FUND LIMITED PARTNERSHIP
By: SCA REALTY I, INC.
By /s/ Mark K. Joseph
Mark K. Joseph
President
Dated: March 22, 1995
