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): May 21, 1997
American Tax-Exempt Bond Trust
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(Exact Name of Registrant as Specified in Charter)
Delaware (Business Trust)
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(State or other Jurisdiction of Incorporation)
33-73688 13-697-2380
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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
N.A.
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(Former Name or Former Address, if Changed Since Last Report
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Item 2. Acquisition or Disposition of Assets
LEXINGTON TRAILS APARTMENTS
General
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On May 7, 1997, the American Tax Exempt Bond Trust (the "Trust") purchased
tax-exempt First Mortgage Bonds (as herein referred to as the "Lexington Trails
Bonds") in an aggregate principal amount of $4,900,000 to fund the purchase of
Lexington Trails Apartments. The Lexington Trails Bonds were issued by the
Harris County Housing Finance Corporation (the "Issuer") and secured by a first
deed of trust and mortgage loan on Lexington Trails Apartments (the "Project" or
"Lexington Trails"), a development consisting of 200 apartment units in Houston,
Texas. Lexington Trails is owned and operated by Lexington Trails-American
Housing Foundation, Inc. (the "Borrower"), which is not affiliated with the
Trust or its manager (the "Manager").
In making this acquisition, the Trust utilized $5,568,182 of its gross proceeds
("Gross Proceeds") from its public offering (including fees and expenses) which
represents 19% of the Gross Proceeds raised.
As required by the Trust Agreement, the Trust has received an MAI appraisal
which indicates that the principal amount of the Lexington Trails Bonds is less
than 85% of the appraised value of the Project. It should be recognized that
appraised values are opinions and, as such, may not represent the true worth or
realizable value of the property being appraised.
Payment Terms
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The Lexington Trails Bonds bear a fixed rate of 9.0%, payable monthly in
arrears.
The term of the Lexington Trails Bonds is twenty-five years. The Trust has the
right to put the Lexington Trails Bonds upon six months notice after the tenth
year. The principal of the Lexington Trails Bonds will be payable upon sale or
refinancing of the Project. Prepayment, in whole or in part, will be prohibited
during the first five years following the acquisition of the Lexington Trails
Bonds. Prepayment in whole will be permitted thereafter subject to the payment
of a premium. If prepaid during the sixth year, the premium is equal to 4% of
the principal amount of the Lexington Trails Bonds outstanding at the time of
prepayment. Thereafter, the premium will be reduced by 1% per year until the
tenth year, when there will be no prepayment premium payable.
Management Agent
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Asset Plus Management ("Asset Plus") is and is expected to continue to be the
property manager for an annual fee of 3.5% of gross rental revenues. Asset Plus
is not affiliated with the Manager.
Description of the Property
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Lexington Trails Apartments is a 200 unit garden community consisting of 28
two-story brick and wood-sided pitched-roofed buildings on ten acres. The
property was constructed in 1973 and substantially rehabilitated in 1995-1996.
Property amenities include: outdoor swimming pools (2), playground, central
laundry (2 buildings), perimeter fence and access gates, jacuzzi, picnic area,
and management office. Individual units feature: central air, walk-in closets,
full kitchen appliance package, fireplaces, private balcony/patio, w/d
connections, and ceiling fans.
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As part of the Trust's purchase of the Lexington Trails Bonds, $509,921 has been
deposited into separate accounts under the control of the bond trustee to fund
certain capital improvements and reserves. Release of funds in those accounts
requires the approval of the Trust.
Lease terms on the apartment units of Lexington Trails range from six to twelve
months. The type and number of apartments together with their projected monthly
rents are as follows:
Approximate Projected
Type Units Square Feet Monthly Rent
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1BR/1BA 16 717 $375
2BR/1BA 16 829 $430
2BR/2BA 8 995 $475
2BR/1.5BA 80 1,133 $500
3BR/2BA 48 1,274 $560
3BR/2BA 32 1,373 $620
The occupancy rate of Lexington Trails was 94% as of March 1997.
Rent Regulations
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The Project is subject to the Issuer's rent regulations which require that 20%
of unit be set aside for tenants at 50% of the area median income (adjusted for
family size), 75% of the units be set aside for tenants at 80% of the area
median income (without adjustment for family size), and 90% of the units be set
aside for tenants with incomes not greater than $56,465 (adjusted annually by
CPI).
Location and Market
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Lexington Trails is located at 6200 West Tidwell Road in the northwestern
portion of the City of Houston, Texas along the Northwest Freeway (U.S. 290)
corridor. The Houston Central Business District is located about ten miles
southeast of the site. The neighborhood is considered 65% to 70% developed at
present and represents one of the more rapidly growing areas of Houston.
Competition
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There are seven apartment complexes in the area that compete directly with
Lexington Trails. They are comparable in unit mix, rental rates, property
amenities, and age. These buildings vary in size from 200 units to 492 units and
the average occupancy as of February 1997 was 93.7%.
Real Estate Taxes
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It is estimated that annual real estate taxes with respect to Lexington Trails
will be $72,104.
Fees
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In connection with the selection and acquisition of the Lexington Trails Bonds,
the Manager did not receive any Mortgage Placement Fees from the Borrower.
However, the Manager is entitled to receive from the Trust a Bond Selection Fee
equal to (i) $111,363, or 2% of the Gross Proceeds and (ii) an Acquisition
Expense Allowance equal to $55,682, or 1% of the Gross Proceeds.
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Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
A. Financial Statements
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Financial Statements will be filed by amendment not later than 60 days
after the date this Form 8-K must be filed.
B. Pro Forma Financial Information
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Financial Statements will be filed by amendment not later than 60 days
after the date this Form 8-K must be filed.
C. Exhibits
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10.1 Harris County Housing Finance Corporation Multifamily Revenue
Bonds 1997 Series (Lexington Trails Apartments) in the principal amount
of $4,900,000 dated May 1, 1997 to be filed by amendment.
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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 Tax-Exempt Bond Trust
(Registrant)
BY: /s/ Stuart J. Boesky
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Stuart J. Boesky
Executive Vice President and
May 21, 1997 Chief Operating Office
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