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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 AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): October 1, 1999
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American Mortgage Acceptance Company
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(Exact Name of Registrant as Specified in Charter)
Massachusetts
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(State or other Jurisdiction of Incorporation)
0-23972 13-6972380
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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 5. OTHER EVENTS
ACQUISITION OF BONDS
On September 30, 1999, American Mortgage Acceptance Company (the "Company")
acquired "BB+" rated commercial mortgage backed subordinated certificates (the
"Bonds") from a Chase Manhattan Bank - First Union National Bank Commercial
Mortgage Trust (the "Trust"). The Bonds have a face amount of $50,399,711. The
Company purchased the Bonds for a purchase price of $35,622,358 ("Purchase
Price"). The Bonds have an annual coupon rate of 6.40% and, based on the
Purchase Price, have an estimated weighted average unleveraged yield to maturity
of approximately 15%.
The Bonds are subordinated securities collateralized by 205 fixed rate
loans on 217 properties (the "Properties") of which 35% are multifamily, 25% are
retail, 18% are office, 4% are mixed use, 4% are health care and 4% are
hospitality. The Properties are located primarily in New York, California,
Florida and Pennsylvania. The Bonds have a weighted average term to maturity of
approximately 13 years.
The Company purchased the Bonds using $16 million in cash and $19.6 million
of debt provided through a repurchase facility from Bear, Stearns & Co., Inc.,
the terms of which are more fully described below.
In connection with the acquisition of the Bonds, the Company entered into
the following agreements:
A. BEAR, STEARNS & CO., INC. REPURCHASE FACILITY
The Company has entered into a repurchase facility (the "Facility") with
Bear Stearns, & Co., Inc. ("Bear, Stearns") whereby Bear, Stearns advanced
$19,568,000 (55% advance on the Purchase Price) in cash towards the purchase of
the Bonds. The Facility has an interest rate based on LIBOR and is adjusted on
the first day of each month. The Facility terminates on March 17, 2000. The
Bonds are pledged as collateral for borrowings under the Facility. The Facility
contains restrictions based on the then current market value of the Bonds as
calculated by Bear, Stearns. A decline in the market value of the Bonds could
result in cash flow from the Bonds being diverted to reduce outstanding
borrowings, the requirement to post additional collateral, or the sale of some
or all of the Bonds.
B. FINANCIAL HEDGE
In order to protect against potential changes in the value of the Bonds
resulting from changes in interest rates, on September 30, 1999, the Company
sold $39,327,000 of United States Treasury Notes. The Company borrowed the
securities to be delivered to the buyer from Bear, Stearns. From the sale of the
Treasuries, the Company received net proceeds of $39,028,841.49. These proceeds
are retained by Bear, Stearns until the Company replaces the borrowed
securities, which it is required to do by March 17, 2000, via purchases of
similar securities at market prices.
C. AGREEMENT WITH ARCAP INVESTORS, L.L.C.
The Company entered into an agreement dated as of September 30, 1999 (the
"Agreement") with ARCap Investors, L.L.C. ("ARCap"), a privately held investment
fund which is managed by an entity controlled by Apollo ARCap, L.L.C. and
RemiCap Investments, L.L.C. ARCap acquired from the Trust all of the commercial
mortgage backed securities that are subordinate to the Bonds (the "Subordinate
Bonds") acquired by the Company. Under the Agreement, the Company has the right
to acquire a portion of the Subordinate Bonds from ARCap and to exchange any or
all of the Bonds and Subordinate Bonds for a preferred equity
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interest in ARCap. Furthermore, AMAC has the right to participate on the same
terms with ARCap in any subsequent resecuritization by ARCap of the Trust's bond
issuance. In connection with such resecuritization, ARCap has the right to cause
AMAC to choose between three alternative options: (i) to sell the Bonds to
ARCap; (ii) to participate with ARCap in the resecuritization, or (iii) to
exchange the Bonds for a preferred equity position in ARCap.
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Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a). FINANCIAL STATEMENTS
Not Applicable.
(b). PRO FORMA FINANCIAL INFORMATION
Not Applicable.
(c). EXHIBITS
99.1 October 11, 1999 Press Release "American Mortgage Acceptance
Company Announces $36 Million BB+ Rated CMBS Acquisition"
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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.
American Mortgage Acceptance Company
(Registrant)
BY: /s/ Stuart J. Boesky
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Stuart J. Boesky
President & Chief Operating Officer
October 15, 1999
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EXHIBIT 99.1
AT THE COMPANY AT THE FINANCIAL RELATIONS
BOARD
Brenda Abuaf General Info: Paul Henning
Director of Shareholder Services Analyst Info: Pamela King
(800) 831-4826 Media Info: Judith Sylk-Siegel
(212) 661-8030
AMERICAN MORTGAGE ACCEPTANCE COMPANY
ANNOUNCES $35.6 MILLION BB+-RATED CMBS ACQUISITION
NEW YORK, NY- OCTOBER 11, 1999- American Mortgage Acceptance Company ("AMAC", or
the "Company") (AMC/AMEX) announced today that it has acquired approximately
$35,622,358 of "BB+" rated commercial mortgage-backed securities ("CMBS")
subordinated certificates (the "Bonds") from a Chase Manhattan Bank-First Union
National Bank Commercial Mortgage Trust (the "Trust").
The Bonds have an expected term of approximately thirteen years and are secured
by 205 mortgages on 217 multifamily, retail, office and other commercial
properties located primarily in New York, California, Florida and Pennsylvania.
AMAC's investment is part of its overall strategy to align itself with ARCap
Investors, L.L.C. ("ARCap") and its management team that has significant
experience in CMBS investment and management. ARCap is a privately held real
estate finance company which is managed by an entity controlled by Apollo ARCap,
L.L.C. and REMICap Investments, L.L.C. ARCap specializes in the acquisition of
subordinated CMBS, and previously acquired from the Trust all of the CMBS that
are subordinate to the Bonds acquired by AMAC (the "Subordinate Bonds").
Under an agreement entered into with ARCap in connection with the acquisition of
the Bonds, AMAC has the right to acquire a portion of the Subordinate Bonds from
ARCap and to exchange any or all of the Bonds and Subordinate Bonds for a
preferred equity interest in ARCap. Furthermore, AMAC has the right to
participate on the same terms with ARCap in any resecuritization by ARCap of the
Chase bonds issuance. In connection with such resecuritization, ARCap has the
right to cause AMAC to choose between three alternative options: (1) sell the
Bonds to ARCap; (2) participate with ARCap in the resecuritization; or (3)
exchange the Bonds for a preferred equity position in ARCap.
AMAC financed the purchase with $16 million of equity and $19.6 million from
a repurchase facility. AMAC put in place a treasury-based hedge to protect
against changes in value of the Bonds due to changes in long-term interest
rates. The hedge also protects AMAC
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against potential earnings impact of changes in its financing costs due to
short-term interest rate fluctuations.
Commenting on the transaction, Stuart J. Boesky, President of AMAC, said "This
investment represents a key step in the execution of AMAC's new business plan
approved by our investors earlier this year. This transaction, together with the
previously announced multifamily venture with Fannie Mae, gives us the platform
we need to achieve our earnings goals. In addition, we have established two
major relationships with entities which are at the forefront of their respective
businesses."
Leonard W. Cotton, Chairman of ARCap, commented "We are very pleased that AMAC
has chosen to invest with ARCap. Our approaches to investment based on
fundamental real estate analysis are very similar, and we look forward to
including AMAC in our group of knowledgeable and experienced real estate
investors who provide informed advice and guidance to ARCap in the analysis of
CMBS and the CMBS market."
AMAC began operations as a finite life, closed-end mortgage REIT in March 1993.
In April 1999, AMAC became an open-ended, infinite life mortgage REIT and on
July 1, 1999 was listed on the AMEX for trading. AMAC's new business plan
focuses primarily on three types of mortgage products: 1) origination of
participating FHA insured multifamily mortgages, 2) origination of construction
and permanent mortgage financing for affordable multifamily housing pursuant to
a new venture with Fannie Mae, and 3) acquisition of subordinated interests in
CMBS.
AMAC is managed by a three-member Board of Trustees, which has delegated daily
management to Related AMI Associates, Inc., an affiliate of Related Capital
Company, a nationwide fully integrated real estate financial services firm.
Since 1972, Related and its affiliates have raised over $4 billion in equity
from over 106,000 investors to acquire a portfolio of over 1000 properties,
bonds and mortgages with a value, at cost, of approximately $9 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
EXPRESS OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS, INCLUDING WITHOUT
LIMITATION THOSE SET FORTH IN AMAC'S SOLICITATION STATEMENT DATED FEBRUARY 11,
1999. 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 ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS
CONTAINED HEREIN TO REFLECT ANY CHANGES IN THE COMPANY'S EXPECTATIONS WITH
REGARD THERETO OR CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY
SUCH STATEMENT IS BASED.
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