Greystone Housing Impact Investors LP Increases Line of Credit to $50 Million

Rhea-AI Summary

Greystone Housing Impact Investors LP (NYSE: GHI) announced a $10 million increase in its secured revolving Line of Credit facility to $50 million, with a new lender. BankUnited N.A. is the sole arranger. The LOC is secured by joint venture equity investments, with a deficiency guaranty from the general partner's affiliate.

Insights

Financial Analyst

The announcement by Greystone Housing Impact Investors LP regarding the expansion of its secured revolving Line of Credit (LOC) facility by $10 million to a new maximum of $50 million is a significant liquidity event that merits attention. The involvement of a new lender signifies market confidence in the Partnership's creditworthiness and strategic direction. From a financial standpoint, the increased LOC enhances the company's financial flexibility, allowing for more robust responses to investment opportunities or unforeseen expenses.

It is important to note that the LOC is secured by the Partnership's joint venture equity investments, which implies that these assets are considered sufficiently valuable by the lending institutions to warrant the extension of additional credit. This can be interpreted as a positive indicator of the underlying value of the Partnership's investments. However, it also means that in the event of a default, these assets could be at risk.

BankUnited N.A.'s role as sole arranger and administrative agent is also noteworthy, as it suggests a streamlined process for the Partnership in managing its credit facility. The deficiency guaranty provided by an affiliate of the general partner adds an extra layer of security for the lender, potentially leading to more favorable credit terms for the Partnership.

Market Research Analyst

The strategic move by Greystone Housing Impact Investors LP to increase its LOC signals a proactive approach to capital management. This could be interpreted by the market as a precursor to future growth initiatives or acquisitions, which may be particularly relevant in the context of the housing market. Given the cyclical nature of real estate, access to additional liquidity can be crucial in capitalizing on market downturns or in pursuing development projects that align with the Partnership's investment thesis.

Market participants often view such credit facility expansions as an indication of a company's operational strength and strategic foresight. It is essential to consider the potential impact on the Partnership's debt-to-equity ratio and overall leverage, as these factors can influence investor perception and the company's stock price. Additionally, the terms of the credit facility, such as interest rates and covenants, are critical in assessing the long-term cost of capital and financial health of the Partnership.

Economist

The broader economic implications of Greystone Housing Impact Investors LP's increased LOC should be considered in the context of current interest rate trends and the economic environment. If the decision to expand the credit facility was made in anticipation of rising interest rates, it could be seen as a strategic move to lock in lower rates and hedge against future borrowing costs. Moreover, the ability to secure additional funds from a new lender may reflect a favorable lending climate and financial stability within the real estate sector.

On the other hand, an increase in available credit could lead to higher leverage, which may become a concern if economic conditions deteriorate. The Partnership's management will need to balance the benefits of immediate liquidity against the potential risks associated with increased debt levels, especially in a sector known for its sensitivity to economic cycles.

OMAHA, Neb., March 06, 2024 (GLOBE NEWSWIRE) -- Greystone Housing Impact Investors LP (NYSE: GHI) (the “Partnership”) announced today that on March 4, 2024, it closed on a $10 million increase in the maximum available commitment of its secured revolving Line of Credit facility (“LOC”) to up to $50 million. The additional $10 million commitment was provided by a new lender to the Partnership. BankUnited N.A. serves as sole arranger and administrative agent. The LOC is secured by the Partnership’s joint venture equity investments. An affiliate of the Partnership’s general partner provides a deficiency guaranty for the facility.

“The increase in LOC commitment provided by a new lender further enhances our available liquidity and demonstrates the Partnership’s ability to obtain additional credit from lenders,” said Kenneth C. Rogozinski, Chief Executive Officer of the Partnership.

About Greystone Housing Impact Investors LP

Greystone Housing Impact Investors LP was formed in 1998 under the Delaware Revised Uniform Limited Partnership Act for the primary purpose of acquiring, holding, selling and otherwise dealing with a portfolio of mortgage revenue bonds which have been issued to provide construction and/or permanent financing for affordable multifamily, seniors and student housing properties. The Partnership is pursuing a business strategy of acquiring additional mortgage revenue bonds and other investments on a leveraged basis. The Partnership expects and believes the interest earned on these mortgage revenue bonds is excludable from gross income for federal income tax purposes. The Partnership seeks to achieve its investment growth strategy by investing in additional mortgage revenue bonds and other investments as permitted by its Second Amended and Restated Limited Partnership Agreement, dated December 5, 2022, taking advantage of attractive financing structures available in the securities market, and entering into interest rate risk management instruments. Greystone Housing Impact Investors LP press releases are available at  www.ghiinvestors.com.

Safe Harbor Statement

Information contained in this press release contains “forward-looking statements,” which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to, risks involving current maturities of our financing arrangements and our ability to renew or refinance such maturities, fluctuations in short-term interest rates, collateral valuations, mortgage revenue bond investment valuations and overall economic and credit market conditions. For a further list and description of such risks, see the reports and other filings made by the Partnership with the Securities and Exchange Commission, including but not limited to, its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The Partnership disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

MEDIA CONTACT:
Karen Marotta
Greystone
212-896-9149
Karen.Marotta@greyco.com

INVESTOR CONTACT:   
Andy Grier
Senior Vice President
402-952-1235

FAQ

What was the increase in the maximum available commitment of Greystone Housing Impact Investors LP's (NYSE: GHI) secured revolving Line of Credit facility?

The increase was $10 million, bringing the total to up to $50 million.

Who provided the additional $10 million commitment to the Line of Credit facility?

The additional commitment was provided by a new lender to the Partnership.

Which entity serves as the sole arranger and administrative agent for the Line of Credit facility?

BankUnited N.A. serves as the sole arranger and administrative agent.

What secures the Line of Credit facility?

The LOC is secured by the Partnership's joint venture equity investments.

Who provides a deficiency guaranty for the Line of Credit facility?

An affiliate of the Partnership's general partner provides a deficiency guaranty.