<PAGE>
PROSPECTUS SUPPLEMENT Rule 424(b)(5)
TO PROSPECTUS DATED July 13, 1994 Registration No. 33-54267
CRIIMI MAE Inc.
750,000 Common Shares
CRIIMI MAE Inc. ("CRIIMI MAE"), an infinite-life, actively managed real
estate investment trust ("REIT"), is the largest multifamily mortgage REIT.
CRIIMI MAE is offering hereby 750,000 shares of its common stock, par value
$.01 per share (the "Common Shares"). The offering price per Common Share is
$7.80. CRIIMI MAE's Common Shares are listed on the New York Stock Exchange
("NYSE") under the symbol "CMM." The reported last sale price of the Common
Shares as reported on the NYSE Composite Tape on August 2, 1995, was $7.875.
_______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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Price to Placement Proceeds to
Public(1) Fee(2) CRIIMI MAE(3)
<S> <C> <C> <C>
Per Common Share, $.01 par value.. $ 7.800 $ .117 $ 7.683
Total Shares...................... $5,850,000 $87,750 $5,762,250
=========================================================================
</TABLE>
(1) The offering price per Common Share is $7.80, which represents the
cumulative average (rounded to the nearest thousandth) of the daily low
price per Common Share, as reported for trades on the NYSE during the
twenty-five consecutive trading days commencing on June 28, 1995.
(2) CRIIMI MAE will pay Yamaichi International (America), Inc. (the "Placement
Agent") an aggregate fee equal to 1.5% of the gross proceeds of the
offering. CRIIMI MAE has agreed to indemnify the Placement Agent against
certain liabilities under the Securities Act of 1933, as amended (the
"Securities Act"). See "Plan of Distribution."
(3) Before deducting expenses payable by CRIIMI MAE estimated at $10,000.
__________________________
Yamaichi International (America), Inc. (the "Placement Agent") has agreed to
use its best efforts to sell, as agent, Common Shares offered by CRIIMI MAE
pursuant to CRIIMI MAE's shelf Registration Statement on Form S-3 (Registration
No. 33-54267) dated July 13, 1994. The Placement Agent will seek commitments
to purchase Common Shares from potential investors but will not accept deposits
or payments of any type prior to the pricing and sale of Common Shares.
Therefore, no arrangements have been made to place any proceeds in escrow or
trust prior to any sale of Common Shares. See "Plan of Distribution." The
Common Shares are offered hereby by CRIIMI MAE through the Placement Agent, as
agent, subject to the approval of certain conditions.
------------------------------------
Yamaichi International (America), Inc.
~as Placement Agent~
------------------------------------
The date of this Prospectus Supplement is August 4, 1995
<PAGE>
CRIIMI MAE
CRIIMI MAE, an infinite-life, actively managed real estate investment
trust ("REIT"), is the largest multifamily mortgage REIT. CRIIMI MAE invests
selectively, focusing primarily on high-quality multifamily mortgage
investments, including government insured or guaranteed mortgage investments
secured by multifamily housing complexes located throughout the United States
("Government Insured Multifamily Mortgages") and government-insured or
guaranteed multifamily construction loans. CRIIMI MAE's investment policies
also permit CRIIMI MAE to invest in other mortgage investments which are not
federally insured or guaranteed. CRIIMI MAE's principal objectives are to
provide stable or growing quarterly cash distributions to its stockholders while
preserving and protecting its capital. CRIIMI MAE has sought to achieve these
objectives by investing primarily in Government Insured Multifamily Mortgages
and, to a lesser degree, in higher yielding uninsured subordinated securities,
using a combination of debt and equity financing.
RECENT DEVELOPMENTS
Merger
Since its formation in 1989, CRIIMI MAE's portfolio management and
day-to-day operations were conducted primarily by CRI Insured Mortgage
Associates Adviser Limited Partnership (the "Adviser"), an affiliate of C.R.I.,
Inc. ("CRI"). At a special meeting held on June 21, 1995, a majority of CRIIMI
MAE's stockholders approved the acquisition (the "Merger") of the mortgage
servicing, origination and advisory businesses conducted by CRI and its
affiliates, including the advisory services previously performed on CRIIMI MAE's
behalf by the Adviser (collectively, the "CRI Mortgage Businesses"). The Merger
was consummated on June 30, 1995. In the Merger, CRIIMI MAE acquired the CRI
Mortgage Businesses by, among other things:
. issuing a total of 2,761,290 Common Shares to CRI's owners, William B.
Dockser and H. William Willoughby, and certain other officers of
CRIIMI MAE. Messrs. Dockser and Willoughby received 96% of the actual
number of Common Shares issued pursuant to the proposed transaction
and officers of CRIIMI MAE received the remainder;
. assuming $9.1 million of outstanding debt of CRI and its affiliates
related to certain of the CRI Mortgage Businesses; and
. granting Messrs. Dockser and Willoughby options to purchase in the
aggregate three million Common Shares. (Options for two million
Common Shares vest pro rata in equal annual installments on the first
five anniversaries of the Merger, with an exercise price of $9.77 per
share. Options for one million Common Shares vest pro rata in equal
annual installments on the first five anniversaries of the Merger,
with an exercise price $12.27 per share). The options expire eight
years after issuance.
In addition to being CRI's owners, Messrs. Dockser and Willoughby are also
officers and directors of CRIIMI MAE. In the Merger, Messrs. Dockser and
Willoughby, and certain other CRI executives and personnel entered into
employment agreements with CRIIMI MAE Management, Inc., a wholly-owned
subsidiary of CRIIMI MAE formed to effectuate the Merger. All shares received
in the Merger are subject to restriction on transfer for three years. In
connection with the Merger, the Board of Directors of CRIIMI MAE adopted the
1995 Stock Option Plan for Key Employees pursuant to which CRIIMI MAE granted
certain officers (other than Messrs. Dockser and Willoughby) options to purchase
an aggregate of 230,000 Common Shares. Such options vest pro rata in equal
annual installments over a three-year period, have an exercise price of $9.77
per share and expire eight years after issuance.
A special committee of CRIIMI MAE's independent directors was formed to
consider the Merger. These independent directors are not and have never been
employees of CRI or CRIIMI MAE. The special committee engaged Duff & Phelps
Capital Markets Co. to render an opinion as to whether the transaction was fair
to CRIIMI MAE and its public shareholders from a financial point of view.
S-2
<PAGE>
Proposed Offering
CRIIMI MAE Financial Corporation ("CMFC"), a wholly-owned, recently formed
special purpose subsidiary of CRIIMI MAE, intends to issue approximately $194
million aggregate principal amount of collateralized mortgage obligations (the
"Bonds"), pursuant to a registration statement on Form S-3 filed under the
Securities Act of 1933, as amended. The Bonds are expected to be secured by two
types of Government Insured Multifamily Mortgages currently held by CRIIMI MAE:
approximately $150 million of mortgage loans insured by the Federal Housing
Administration pursuant to provisions of the National Housing Act, which are
first or second liens on residential apartment, nursing home or townhouse
complexes; and approximately $50 million of mortgage-backed securities which are
guaranteed by the Government National Mortgage Association as to the monthly
payment of the outstanding principal of, and interest on, the underlying
multifamily mortgages. CRIIMI MAE expects to receive from CMFC the net proceeds
from the Bond offering in exchange for transferring the foregoing Government
Insured Multifamily Mortgages to CMFC. CRIIMI MAE intends to use the net
proceeds from the offering of Bonds primarily to retire certain outstanding
indebtedness of CRIIMI MAE totalling approximately $165 million in aggregate
principal amount. CRIIMI MAE may use any remaining net proceeds (i) to acquire
mortgage investments, including Government Insured Multifamily Mortgages, other
insured mortgages and other uninsured mortgage investments, (ii) to make other
investments and/or acquisitions relating to CRIIMI MAE's mortgage business,
including investments in subordinated, uninsured securities and other higher
yielding investments, and/or (iii) for other general corporate purposes,
including working capital.
Acquisition of Mortgage Securities
Subsequent to December 31, 1994, CRIIMI MAE has purchased four tranches of
subordinated securities issued by a real estate mortgage investment conduit
("REMIC") sponsored by Nomura Asset Securities Corporation and three tranches of
subordinated securities issued by a REMIC sponsored by Structured Mortgage
Securities Corporation. The securities, which were purchased for a total of
approximately $32.2 million, have a face value of approximately $40.4 million.
Each issuance is backed by a pool of uninsured multifamily and commercial
mortgages.
Although investments in Government Insured Multifamily Mortgages and
government insured or guaranteed multifamily construction loans will continue to
comprise a substantial majority of CRIIMI MAE's total consolidated asset base,
subordinated securities and other higher yielding investments similar to the
REMIC tranches discussed above are anticipated to represent a major component of
CRIIMI MAE's new business activity in the future. These investments will be
made only after CRIIMI MAE has performed due diligence on the assets and has
determined that certain underwriting criteria have been met.
Litigation
On June 20, 1995, Edge Partners, L.P. filed in the United States District
Court for the District of Maryland a complaint against CRIIMI MAE's directors.
The complaint purports to be a derivative action on behalf of CRIIMI MAE and
alleges breach of fiduciary duty and a misleading proxy statement in connection
with the Merger. The plaintiff seeks unspecified damages, a determination that
the stockholder vote authorizing the Merger should be set aside and other
relief. Management of CRIIMI MAE and the defendants believe that the suit is
without merit.
USE OF PROCEEDS
CRIIMI MAE intends to use the net proceeds from the sale of the Common
Shares offered hereby (i) to acquire mortgage investments, including Government
Insured Multifamily Mortgages, other insured mortgages and other uninsured
mortgage investments, (ii) to make other investments and/or acquisitions
relating to CRIIMI MAE's mortgage business, including investments in
subordinated, uninsured securities and other higher yielding investments,
and/or (iii) for other general corporate purposes, including working capital.
S-3
<PAGE>
PRICE RANGE OF COMMON SHARES AND DIVIDENDS
The Common Shares are traded on the NYSE under the symbol "CMM." The
table below sets forth the high and the low closing sales prices per Common
Share as reported on the NYSE Composite Tape and the amount of cash dividends
paid per Common Share during the periods indicated. As of July 28, 1995, there
were approximately 25,000 holders of record of Common Shares.
<TABLE>
<CAPTION>
Price Range of
Common Shares Dividends Paid
--------------------------------
High Low per Share
<S> <C> <C> <C>
Year Ended December 31, 1993:
1st Quarter $11 1/4 $ 9 3/4 $ 0.28
2nd Quarter 11 3/4 10 3/4 0.28
3rd Quarter 12 1/2 11 1/8 0.28
4th Quarter 12 3/4 10 3/4 0.28
Year Ended December 31, 1994:
1st Quarter $12 $ 9 3/8 $ 0.29
2nd Quarter 11 1/4 9 1/2 0.29
3rd Quarter 11 1/4 9 3/8 0.29
4th Quarter 9 3/4 6 5/8 0.29
Year Ended December 31, 1995:
1st Quarter $ 8 3/8 $ 6 3/4 $0.225
2nd Quarter 8 3/4 7 0.225
3rd Quarter (through August 2, 1995) 8 1/4 7 5/8 --
</TABLE>
The reported last sales price of the Common Shares as reported on the NYSE
Composite Tape on August 2, 1995 was $7.875.
PLAN OF DISTRIBUTION
CRIIMI MAE has engaged the Placement Agent, Yamaichi International
(America), Inc., as its agent, pursuant to a letter agreement dated October 31,
1994, as amended and supplemented (the "Engagement Letter"). The Placement
Agent has agreed to use its best efforts to sell, as agent, Common Shares
offered by CRIIMI MAE pursuant to CRIIMI MAE's shelf Registration Statement on
Form S-3 (Registration No. 33-54267) dated July 13, 1994. CRIIMI MAE's
engagement of the Placement Agent is on a non-exclusive basis.
Pursuant to the Engagement Letter, the Placement Agent will seek
commitments to purchase Common Shares from potential investors, but will not
accept deposits or payments of any type prior to the pricing and sale of Common
Shares. Therefore, no arrangements have been made to place any proceeds in
escrow or trust prior to the sale of any Common Shares. The Placement Agent has
made no commitment to take down all or any part of the Common Shares offered
hereby. CRIIMI MAE will have the sole right to accept offers to purchase the
Common Shares and may reject any proposed purchase of Common Shares.
Subject to the terms of the Engagement Letter, CRIIMI MAE will pay the
Placement Agent a fee equal to 1.5% of the gross proceeds of the offering.
Pursuant to a consulting arrangement between the Placement Agent and Bouvet
Limited ("Bouvet"), Bouvet will receive, for advisory and other services
provided in connection with the offering, a portion of the fees received by the
Placement Agent. CRIIMI MAE has agreed to indemnify the Placement Agent and
Bouvet against certain losses, claims, damages and liabilities arising in
connection with the offering, including certain liabilities arising under the
Securities Act, and to reimburse the Placement Agent and/or Bouvet for expenses
reasonably incurred in connection with any such actions.
The foregoing does not purport to be a complete statement of the terms and
conditions of the Engagement Letter, copies of which are on file at the offices
of the Placement Agent and CRIIMI MAE.
S-4
<PAGE>
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No dealer, salesperson or other person is authorized in connection with any
offering made hereby to give any information or to make any representation other
than those contained or incorporated by reference in this Prospectus Supplement
and the Prospectus in connection with the offer made by this Prospectus
Supplement and the Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized. This
Prospectus Supplement and the Prospectus do not constitute an offer to sell or a
solicitation of an offer to buy any security other than the securities offered
hereby, nor do they constitute an offer to sell or a solicitation of any offer
to buy any of the securities offered hereby to any person in any jurisdiction in
which it is unlawful to make such an offer or solicitation. Neither the
delivery of this Prospectus Supplement and the Prospectus nor any sale made
hereunder and thereunder shall, under any circumstances, create any implication
that there has not been any change in the information contained herein or
therein or in the affairs of CRIIMI MAE since the date hereof.
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
CRIIMI MAE....................................... S-2
Recent Developments.............................. S-2
Use of Proceeds.................................. S-3
Price Range of Common Shares and Dividends....... S-4
Plan of Distribution............................. S-4
</TABLE>
Prospectus
<TABLE>
<CAPTION>
Page
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<S> <C>
Available Information............................ 2
Incorporation of Certain Documents by Reference.. 2
Prospectus Summary............................... 4
CRIIMI MAE....................................... 6
Recent Developments.............................. 10
Use of Proceeds.................................. 10
Ratios of Earnings to Fixed Charges.............. 11
Description of Debt Securities................... 11
Description of Capital Stock..................... 21
Certain United States Tax Considerations......... 27
Plan of Distribution............................. 28
Legal Matters.................................... 29
Experts.......................................... 29
</TABLE>
============================================================================
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CRIIMI MAE Inc.
750,000 Common Shares
____________________
PROSPECTUS SUPPLEMENT
____________________
YAMAICHI INTERNATIONAL
(AMERICA), INC.
~as Placement Agent~
============================================================================
