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): September 2, 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)
0-28340 13-7033312
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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
Not Applicable
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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
High Pointe Apartments
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General
On September 2, 1997, the Trust purchased Redevelopment Authority of the County
of Dauphin, Multifamily Housing Revenue Bonds (High Pointe Club Apartments
Project) Series 1989 (as hereinafter referred to in this Form 8-K, (the "High
Pointe Bonds") in an aggregate principal amount of $3,250,000. The High Pointe
Bonds are secured by a first Mortgage and mortgage loan on High Pointe
Apartments (the "Project" or "High Pointe") a development consisting of 240
apartment units in Harrisburg, Pennsylvania, pari passu with $8,900,000
Redevelopment Authority of the County of Dauphin, Multifamily Housing Revenue
Bonds (Green Hill Project), Series 1986 (the "1986 Bonds"). The 1986 Bonds are
owned by Summit Tax Exempt Bond Fund, L.P. which is managed by an affiliate of
the Manager of the Trust. High Pointe is owned and operated by RHA INV., INC. an
affiliate of the Manager (the "Borrower"). The Trust has obtained a fairness
opinion in accordance with the Trust's requirements for transactions with
affiliates from The Sturges Company, a long-established nationally recognized
investment banking firm specializing in multifamily tax-exempt underwritings.
In making this acquisition, the Trust utilized $3,693,182 of its gross proceeds
("Gross Proceeds") from its public offering (including fees and expenses). The
High Pointe Bonds were acquired from third party owners not affiliated with the
Manager.
As required by the Trust Agreement, the Trust has received an MAI appraisal
which indicates that the principal amount of the High Pointe 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
The High Pointe Bonds currently meet the Trust's investment criteria and bear a
fixed Current Interest rate of 9.0% per annum, payable monthly in arrears. The
High Pointe Bonds have a current interest payment priority over the 1986 Bonds.
The Trust has been informed that, as of the date hereof, the Borrower is current
with respect to all payments of principal and interest on the High Pointe Bonds.
The High Pointe Bonds mature on June 1, 2006. The principal of the High Pointe
Bonds will be payable upon maturity, sale or refinancing of the Project. The
High Pointe Bonds will receive a $750,000 priority payment of principal prior to
any payment of principal on the 1986 Bonds. Remaining principal on the High
Pointe Bonds and principal and accrued interest on the 1986 Bonds will be paid
pari passu, that is by an equal progression of payments after the payment of
interest, other than interest accrued and upaid on the 1986 Bonds on June 6,
1989, and the $750,000 priority amount.
Management Agent
Related Management Company ("Related") is and is expected to continue to be the
property manager for High Pointe for an annual fee equal to 5% of gross rental
revenues. Related is affiliated with the Manager.
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Description of the Property
High Pointe consists of 240 apartment units contained in 30 garden-style
buildings on approximately 29.5 acres. High Pointe was completed in 1988 and as
of August 17, 1997 is 96.6% occupied.
Each apartment unit in High Pointe contains a walk-in closet, central air,
thermal storm windows with screens, garbage disposals, dishwashers, microwaves
and stacked combination washer/dryers. Some units feature ceiling fans and
skylights. Project amenities include a swimming pool, tennis court, golf driving
station, and car wash. There is also a full clubhouse with exercise room, sauna,
and lockers.
Lease terms on the apartment units of High Pointe are for twelve months. The
average rental income per square foot for the one-year period ending December
31, 1996 was $7.45. The type and number of apartment units together with their
monthly rents are as follows:
Contracted Monthly Approximate
Number of Units Type of Unit Rent Square Feet
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28 1 BR/1 BA $491 700
28 1 BR/1 BA $531 760
86 1 BA/1.5 BA $575 900
16 2 BR/2 BA $605 850
34 2 BR/1.5 BA $619 900
48 2 BR/2.5 BA $704 1,100
Location & Market
High Point is located within Susquehanna Township, a suburb of the City of
Harrisburg, with a population of 18,636. The Project's strategic location places
it within convenient distance of ample amenities and within 3.5 miles of the
Harrisburg Central Business District and the State Capital.
Competition
There are five properties, consisting of 4,078 units, that are in direct
competition with the Project. The occupancy rates at the competing properties
range from 95% to 100%.
Real Estate Taxes
Annual real estate taxes for 1996 (payable in 1997) are approximately $116,600.
Fees
In connection with the selection and acquisition of the High Pointe Bonds, the
Manager did not receive any Mortgage Loan Placement Fees from the Borrower.
However, the Manager received from the Trust (i) a Bond Selection Fee equal to
2.00% of the Gross Proceeds attributable to the investment ($73,863.64) and (ii)
an Acquisition Expense Allowance equal to 1.00% of the Gross Proceeds
attributable to the investment ($36,931.82).
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Rent Regulations
At least 20% of the units must be occupied by persons or families earning no
more than 80% of the area's median gross income, adjusted for family size. There
are no rent restrictions.
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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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Pro Forma 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 Redevelopment Authority of the County of Dauphin Multifamily
Housing Revenue Bond (High Pointe Club Apartments Project), Series
1989, in the principal amount of $3,250,000.00 dated September 2, 1997.
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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
September 11, 1997 Chief Operating Officer
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EXHIBIT 10.1
UNITED STATES OF AMERICA
COMMONWEALTH OF PENNSYLVANIA
REDEVELOPMENT AUTHORITY OF THE COUNTY OF DAUPHIN
MULTIFAMILY HOUSING REVENUE BOND
(HIGH POINTE CLUB APARTMENTS PROJECT)
SERIES 1989
No. R-1
Original Date of Issue: June 27, 1989
Maturity Date: June 1, 2006
Rate of Interest Commencing September 2, 1997: 9%
Registered Owner: American Tax Exempt Bond Trust
Principal Amount: THREE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($3,250,000)
The REDEVELOPMENT AUTHORITY OF THE COUNTY OF DAUPHIN (the "Issuer"), a
public body corporate and politic and an agency of the Commonwealth of
Pennsylvania (the "State"), created and existing under and by virtue of the laws
of the State, hereby acknowledges itself indebted and for value received
promises to pay to the registered owner hereof stated above, or registered
assigns, at the maturity date stated above, but solely from the sources
hereinafter mentioned, the principal amount stated above, and to pay interest
thereon from the most recent Interest Payment Date (hereinafter defined)
preceding registration hereof, unless registered on an Interest Payment Date for
which interest has been paid (or after the respective Record Date, hereinafter
defined), in which event interest will be paid from such Interest Payment Date.
Principal of and premium, if any, and interest on this Bond are payable in
such money of the United States of America as is lawful at the time of payment.
This Privately Held 1989 Bond shall bear interest at the rate set forth
above. The rate of interest has been determined as provided in the Indenture
(hereinafter defined) and such determination is conclusive and binding upon the
registered Owners of the Privately Held 1989 Bonds. Interest on Privately Held
1989 Bonds shall be computed on the basis of a 360-day year of twelve 30-day
months. The Interest Payment Date means with respect to the Privately Held 1989
Bonds the first Business Day of each month.
The payment of interest hereon shall be made by check mailed to the
registered owner hereon at its address as it appears on the bond registration
books of SunTrust Bank, Central Florida, National Association, as Co-Trustee, at
the close of business on the 7th day next preceding such Interest Payment Date
(the "Record Date"), except that such payment, at the request of a registered
owner of $1,000,000 or more in aggregate principal amount of Privately Held 1989
Bonds shall be made by SunTrust Bank, Central Florida, National Association, as
Co-Trustee, by wire transfer to the account designated by such registered Owner
to the Co-Trustee in writing at least fifteen (15) days before the Record Date
for such payment.
Principal and premium, if any hereon will be payable upon presentation and
surrender of this Bond by the registered owner hereof or by his, her or its duly
authorized attorney at the principal corporate trust office of the Co-Trustee.
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NEITHER THE CREDIT NOR THE TAXING POWER OF THE COUNTY OF DAUPHIN, THE
COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED FOR
THE PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THIS PRIVATELY HELD
1989 BOND; NOR SHALL THIS PRIVATELY HELD 1989 BOND BE DEEMED AN OBLIGATION OF
THE COUNTY OF DAUPHIN, THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL
SUBDIVISION THEREOF; NOR SHALL THE COUNTY OF DAUPHIN, THE COMMONWEALTH OF
PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF BE LIABLE FOR THE PAYMENT OF
THE PRINCIPAL OF, THE PREMIUM, IF ANY, OR INTEREST ON THIS PRIVATELY HELD 1989
BOND. THE ISSUER HAS NO TAXING POWER.
This Bond is one of the $3,250,000 principal amount of bonds designated as
"Redevelopment Authority of the County of Dauphin Multifamily Housing Revenue
Bonds (High Pointe Club Apartments Project) Series 1989" (the "1989 Bonds") all
of like tenor, except as to numbers and denominations. This 1989 Bond is issued
as a Privately Held 1989 Bond (herein called the "Privately Held 1989 Bonds")
pursuant to a certain Trust Indenture dated as of June 1, 1986 (the "Original
Indenture") by and between Issuer and the Original Trustee, as amended by an
Assumption and Amendment Agreement dated as of October 27, 1988 (the "Assumption
Agreement") by and among the Issuer, the Original Trustee, the Developer and the
1986 Bondholder, as amended and supplemented by a First Amendment and Supplement
to the Trust Indenture dated as of May 1, 1989 (the "First Supplemental
Indenture") by and among the Issuer, SunTrust Bank, Central Florida, National
Association and Mellon Bank, N.A., as successor co-trustees (collectively, the
"Trustee"), and pursuant to the Pennsylvania Urban Redevelopment Law, the Act of
May 24, 1945, P.L. 991, as amended. (The Original Indenture, as amended by the
Assumption Agreement and as amended and supplemented by the First Supplemental
Indenture, together with all indentures supplemental thereto, are collectively
referred to as the "Indenture".) This Privately Held 1989 Bond is being issued
on September 2, 1997 to replace the Publicly Held 1989 Bonds of the Issuer as
required by Section 13-1.02 of the Indenture upon conversion of the interest
rate on such bonds on such date to the Market Rate pursuant to Section
3.06(b)(3)(ii) of the Indenture. Privately Held 1989 Bonds are issued only in
fully registered form in denominations of $5,000 or any integral multiple
thereof. The 1989 Bonds were issued for the purposes of providing additional
funds for the completion of qualified multifamily rental housing units for the
High Pointe Club Apartments Project and of paying certain expenses incidental
thereto.
The Privately Held 1989 Bonds are payable from the sources described in and
are all secured by the pledge to the extent provided in Section 1.04 of the
Indenture of certain moneys, rights and interests, including the 1989 Promissory
Note dated as of May 1, 1989 and executed by the Developer in favor of the
Issuer, and by the assignment by the Issuer of certain of the rights, interests
and remedies of the Issuer under the Loan Documents, including the Mortgage and
the Loan Agreement.
Reference is made to the Indenture for a description of the receipts and
revenues assigned and pledged, the nature, extent and manner of enforcement of
the security for the Privately Held 1989 Bonds of the respective series and a
statement of the rights, duties and obligations of the Issuer, the Developer and
the Trustee and the rights of the owners of the Privately Held 1989 Bonds, to
all the provisions of which Indenture the owner hereof by the acceptance of this
Privately Held 1989 Bond assents. Capitalized terms used
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herein which are defined in the Indenture are used herein as so defined, unless
the context clearly requires otherwise.
REDEMPTION OF PRIVATELY HELD 1989 BONDS
The Privately Held 1989 Bonds are subject to redemption by the Issuer prior
to maturity as a whole or in part at such time or times, under such
circumstances, at such redemption prices and in such manner as is set forth in
the Indenture. The Trustee shall give notice of redemption in the manner and at
the times required by the Indenture. The Privately Held 1989 Bonds or portions
of the Privately Held 1989 Bonds to be redeemed shall be selected by the Trustee
by lot, in any manner as the Trustee deems fair.
GENERAL PROVISIONS
The registered Owner of this Privately Held 1989 Bond shall have no right
to enforce the provisions of this Privately Held 1989 Bond or of the Indenture
except as specified in the Indenture.
The Indenture and the other Issuer Documents may be modified or amended to
the extent permitted by the Indenture and as provided therein. Certain
amendments, modifications or changes which would affect the rights of registered
Owners of Privately Held 1989 Bonds may be made only with the consent of
two-thirds of the registered Owners of the Privately Held 1989 Bonds then
Outstanding under the Indenture, as provided in the Indenture. Any such consent
by the registered Owner of this Privately Held 1989 Bond shall be conclusive and
binding upon such registered Owner and all subsequent registered Owners hereof.
Notwithstanding the provisions of the preceding paragraph the consent of
all Owners of Privately Held 1989 Bonds is required for modifications which
would extend the stated maturity or time for paying principal of and interest on
any Privately Held 1989 Bond, reduce the principal amount of or rate of interest
payable on any Privately Held 1989 Bond, prefer or give a priority to any
Privately Held 1989 Bond over any other Privately Held 1989 Bond, reduce the
percentage of the Owners of Outstanding Privately Held 1989 Bonds required for
consent to a Supplemental Indenture, create certain liens, or reduce rights,
powers, duties, trusts, obligations, remedies, immunities and privileges of the
Trustee.
Upon the occurrence of certain Events of Default all Privately Held 1989
Bonds may be declared immediately due and payable and thereupon such Privately
Held 1989 Bonds shall be immediately due and payable as provided in the
Indenture.
Privately Held 1989 Bonds are transferable by the registered Owner thereof
in person or by his attorney duly authorized in writing at the principal office
of the Trustee but only in the manner and subject to the limitations provided
for in the Indenture and upon surrender and cancellation of the Privately Held
1989 Bond or Privately Held 1989 Bonds. Upon such transfer a new Privately Held
1989 Bond or Privately Held 1989 Bonds in Authorized Denominations in the same
aggregate principal amount will be issued to
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the transferee in exchange.
The Trustee may require a registered Owner, among other things, to pay any
tax, fee or other governmental charge required by law or permitted by the
Indenture. Except in connection with purchases of Privately Held 1989 Bonds
tendered on demand of the registered Owner thereof, the Trustee need not
exchange or register the transfer or a Privately Held 1989 Bond which has been
selected for redemption and need not exchange or register the transfer of any
Privately Held 1989 Bond for a period of ten (10) days next preceding the giving
of any notice of redemption.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things
required to exist, to happen and to be performed precedent to and in the
issuance of this Privately Held 1989 Bond have existed, have happened and have
been performed in due form, time and manner as required by law.
This Privately Held 1989 Bond shall not be valid or become obligatory for
any purpose or be entitled to any security or benefit under the Indenture until
the certificate of authentication hereon shall have been signed by the Trustee.
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IN WITNESS WHEREOF, the Redevelopment Authority of the County of Dauphin
has caused this Privately Held 1989 Bond to be signed in its name and on its
behalf with the signature of its Chairman and its corporate seal to be hereunto
affixed or imprinted and duly attested with the signature of its Secretary.
REDEVELOPMENT AUTHORITY OF THE
ATTEST: COUNTY OF DAUPHIN
/s/ William Pettigrew By: /s/ William R. Baker
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Secretary Chairman
(SEAL)
FORM OF CERTIFICATE OF AUTHENTICATION
This Privately Held 1989 Bond is one of the Privately Held 1989 Bonds
described in the within mentioned Indenture and is one of the Multifamily
Housing Revenue Bonds (High Pointe Club Apartments Project) Series 1989 of the
Redevelopment Authority of the County of Dauphin.
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Lisa George
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Authorized Representative
Date of Registration and Authentication:
September 2, 1997
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