In October 2023, the Partnership originated an MRB investment for the construction of an affordable multifamily property. The Partnership’s remaining commitment will be funded on a draw-down basis during construction. The following table summarizes the terms of the Partnership’s MRB investment:

Commitment

Month
Acquired

Property Location

Units

Maturity Date

Fixed Interest
Rate

Initial
Funding

Maximum
Commitment

The Safford

October 2023

Marana, AZ

200

10/10/2026

7.59%

7,560,034

43,000,000

In October 2023, the Partnership entered into a new TOB trust financing arrangement with Mizuho. The following table summarizes the initial terms of the TOB trust financing:

TOB Trusts Securitization

TOB
Trust Financing

Stated Maturity

Interest Rate Type

Tax-Exempt Interest on Senior Securities

Remarketing Senior Securities Rate

Facility Fees

Interest Rate

The Safford MRB

6,050,000

October 2026

Variable

Yes

4.46%

1.44%

5.90%

In October 2023, the Partnership entered into an additional interest rate swap agreement to mitigate interest rate risk associated with its variable rate TOB trust financings. The following table summarizes the terms of the interest rate swap agreement:

Trade Date

Notional Amount

Effective Date

Termination Date

Fixed Rate Paid

Variable Rate Index Received

Variable Debt
Financing Hedged

Counterparty

October 2023

3,520,000

(1)

10/10/2023

4/1/2027

4.722%

Compounded SOFR

TOB Trusts

Mizuho Capital Markets

(1)

The notional amount increases according to a schedule up to a maximum notional amount of $24.1 million.

In October 2023, the Partnership redeemed $10.0 million of Series A Preferred Unit of an investor. The redemption was paid using unrestricted cash on hand. In addition, in October 2023, an investor provided notice of its intent to redeem $10.0 million of Series A Preferred Units in March 2024.

In November 2023, the Partnership completed a trust securitization financing transaction of its residual interests in the M31, M33 and M45 TEBS financings (the “TEBS Residual Financing”). The securitization involved the sale of the TEBS Financings residual interests to an issuer, which then issued and sold $61.5 million of senior Affordable Housing Multifamily Certificates. The Partnership retained $20.5 million of residual Affordable Housing Multifamily Certificates also issued by the issuer. The senior Affordable Housing Multifamily Certificates are considered secured financing of the Partnership and were sold to third party investors in exchange for financing proceeds. The residual Affordable Housing Multifamily Certificates were retained by the Partnership. The $61.5 million of senior Affordable Housing Multifamily Certificates represent secured financing of the Partnership for financial reporting purposes and are entitled to interest at a fixed rate of 7.125% per annum and certain principal payments from the assets within the TEBS Residual Financing. The Partnership is entitled to all residual cash flows of the TEBS Residual Financing after payments to the senior Affordable Housing Multifamily Certificates and trustee expenses of 0.03% per annum. The senior Affordable Housing Multifamily Certificates are non-recourse to the Partnership and are not subject to mark-to-market collateral posting. The term of the TEBS Residual Financing will end upon the earlier of repayment of the $61.5 million stated amount of the senior Affordable Housing Multifamily Certificates or July 25, 2034. The Partnership received net proceeds of approximately $60.4 million, after payment of placement, legal and other related costs. Approximately $57.9 million of the net proceeds, in addition to approximately $24.6 million of restricted cash released under our total return swap, were used to pay down approximately $82.5 million of outstanding principal and accrued interest of the Partnership’s Secured Notes.

In November 2023, the Jackson Manor MRB was resized downward to a principal amount of approximately $4.8 million upon conversion to permanent financing. The borrower repaid principal of approximately $2.1 million upon conversion, of which approximately $1.8 million was used to repay amounts outstanding on the related TOB financing.

In November 2023, the Partnership extended the Residency at the Mayer TOB trust financing maturity date to October 2026. There were no additional changes to terms associated with the extensions.