Greystone Housing Impact Investors LP Issues 500,000 Series B Preferred Units
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Insights
The issuance of Series B Preferred Units by Greystone Housing Impact Investors LP represents a strategic move to secure additional capital. The $5,000,000 raised through this private placement can be leveraged to fund the Partnership's growth initiatives or to strengthen its balance sheet. Considering the fixed annual distribution rate of 5.75%, this financing is relatively cost-effective compared to other forms of debt, which might carry higher interest rates or more stringent terms.
From an investor's perspective, the non-dilutive nature of the preferred units is beneficial as it avoids the erosion of existing unitholders' equity. This is particularly important for long-term investors concerned with maintaining their proportionate ownership and influence in the company. However, the non-voting characteristic of these units indicates that new investors will not have a direct say in the Partnership's governance, which might be a drawback for some.
It's also noteworthy that these units offer Community Reinvestment Act benefits, which can be an incentive for financial institutions looking to enhance their community investment portfolios. This could potentially lead to a more diversified and socially responsible investor base for Greystone Housing Impact Investors LP.
In the context of the current market, the decision to issue Series B Preferred Units can be seen as a response to the growing demand for fixed-income investments. Amidst economic uncertainty, investors often seek out stable and predictable returns, which these units provide with their fixed distribution rate. The 5.75% yield is competitive, potentially attracting institutional investors who are searching for higher income streams in a low-interest-rate environment.
Furthermore, the option for redemption starting in February 2030 offers a clear exit strategy for investors, which can be a critical factor in their decision-making process. It's important to monitor how this issuance affects the Partnership's financial flexibility, as the commitment to fixed distributions could impact its ability to respond to changing economic conditions.
The issuance of Series B Preferred Units under the 'shelf' registration statement allows for a streamlined process, enabling the Partnership to act swiftly in capitalizing on favorable market conditions. This legal framework is designed to facilitate the efficient raising of capital while remaining compliant with SEC regulations.
However, the characteristics of these preferred units, such as being non-cumulative, non-convertible and having specific redemption options, must be clearly communicated to potential investors to ensure transparency and avoid future legal complications. The adherence to these terms will be crucial in maintaining investor trust and the Partnership's reputation in the market.
OMAHA, Neb., Feb. 06, 2024 (GLOBE NEWSWIRE) -- Greystone Housing Impact Investors LP (NYSE: GHI) (the “Partnership”) announced today that on February 2, 2024 the Partnership executed a Subscription Agreement to issue 500,000 Series B Preferred Units representing limited partnership interests in the Partnership (the “Series B Preferred Units”) to an institutional investor, resulting in
The Series B Preferred Units are non-cumulative, non-convertible, and non-voting units of limited partnership interests in the Partnership for which the holder has an option to have the units redeemed on the sixth anniversary of the acquisition date and each subsequent anniversary thereafter. The earliest potential redemption date for the newly issued Series B Preferred Units is February 2030, with certain exceptions.
“We are pleased that a new financial institution has invested in our Series B Preferred Units, which provides non-dilutive, fixed-rate and low cost institutional capital to execute on our strategy for the benefit of our unitholders,” said Kenneth C. Rogozinski, Chief Executive Officer of the Partnership. “This is our second issuance of Series B Preferred Units that provide an attractive fixed annual distribution rate of
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.
INVESTOR CONTACT:
Andy Grier
Senior Vice President
402-952-1235
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