America First Multifamily Investors, L.P. (NASDAQ: ATAX) (the “Partnership” or “ATAX”) today announced that the Panel of Managers of Greystone AF Manager, LLC, ATAX’s general partner, has authorized a 1-for-3 reverse unit split (the “Reverse Unit Split”) of its advantageous unit certificates portraying designated limited partnership interests (“BUCs”).

The Reverse Unit Split will go into effect after the market closes on April 1, 2022, and the Bucs will begin trading on a split-adjusted basis on April 4, 2022.

Holders of BUCs will receive one BUC for every three BUCs held at the close of latest business blog ideas on April 1, 2022, as a result of the Reverse Unit Split. All fractional BUCs generated by the Reverse Unit Split will be rounded to the closest whole BUC, with any fraction equal to or more than 0.5 BUC rounded up to the next higher BUC, as specified under the Partnership’s limited partnership agreement.

Q1 2022

As interest rates rise, consider the influence on the company’s cash flow. These cash flow modifications also take into account the company’s hedges and the impact they might have. In other words, the influence will most likely be greater in the long run (beyond 12 months). 

One component that is difficult to envision is how this will all play out in reality. The preceding calculations presume a parallel movement in interest rates, but we all know that this is not the case. Short-term and longer-term interest rates change differently, and this influences the results.

We would focus on the asset valuations in addition to the cash flow. As seen above, low-yielding revenue bonds account for 71% of assets. As mortgage rates have recently had bigger spreads compared to Treasuries, there is some duration risk here as well as some credit risk.

Evaluation and Decision

Despite declining real estate assets, ATAX’s price to tangible book value ratio is an excellent indicator of valuation. The rationale for this is because actual real estate accounts for a relatively minor fraction of the total, and revenue bonds are valued at fair value each quarter. In other words, the balance sheet’s fair value of equity is unexpectedly near to the firm’s liquidation value. At 1.12X tangible book value, ATAX is still in the middle of what we’ve observed.

Declaratory Safe Harbor

This news release contains “forward-looking statements,” which are based on current estimates, predictions, and assumptions that are subject to risks and uncertainties that might cause actual outcomes and results to differ considerably. 

These risks and uncertainties include, but are not limited to, current maturities of our financing arrangements and our ability to renew or refinance such maturities, variances in short-term interest rates, secured debt valuations, loan revenue bond investment share prices, and overall financial and credit market conditions. 

See the Partnership’s reports and other filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ending December 31, 2021, for a more detailed list and discussion of such risks.

The Partnership expressly states that it has no intention or duty to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise.

Inflation is still the most significant impediment

Americans are suffering the effects of rising prices: According to the latest Forbes Advisor-Ipsos Consumer Confidence Weekly Tracker, 65 percent of individuals anticipate the pace of inflation will rise in the coming year.

This is important for market players because high levels of inflation may have a detrimental influence on both expenditure, which accounts for around two-thirds of GDP, and consumer mood. For example, February retail sales fell short of estimates, owing in large part to rising prices, and the Fed cut its forecast for GDP growth this year at its March meeting.

Conclusion

One method to protect your portfolio from the influence of America’s first multi-family investors is to diversify beyond stocks and bonds into other assets that have a lesser link to these markets.

Inflation challenges the present investment environment. It depreciates the worth of money that isn’t invested while rising interest rates reduce the value of existing bond allocations, and many stock market sectors have suffered this year.

In addition to the stock market’s year-to-date downturn, the likelihood of rising interest rates in the future may present an opportunity to buy equities at a discount. And investors may want to consider arranging their portfolios in April to take advantage of the upcoming dynamics.