Item
7.01 Regulation FD Disclosure.
The
information in this Current Report on Form 8-K is furnished pursuant to Item
7.01 and shall not be deemed “filed” for any purpose, including for the purposes
of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or
otherwise be subject to the liabilities of that Section. The
information herein shall not be deemed incorporated by reference into any prior
filing under the Securities Act of 1933 or the Exchange Act, regardless of any
general incorporation language in such filing.
In
this Current Report, except as expressly indicated or unless the context
otherwise requires, the “Company,” “MuniMae,” “we,” “our” or “us” means
Municipal Mortgage & Equity, LLC, a Delaware limited liability company, and
its consolidated subsidiaries.
Cautionary
Statement Regarding Forward-Looking Statements
This
Current Report contains forward-looking statements intended to qualify for the
safe harbor contained in Section 21E of the Exchange
Act. Forward-looking statements often include words such as “may,”
“will,” “should,” “anticipate,” “estimate,” “expect,” “project,” “intend,”
“plan,” “believe,” “seek,” “would,” “could” and similar words or are made in
connection with discussions of future operating or financial
performance.
Forward-looking
statements reflect our management’s expectations at the date of this Current
Report regarding future conditions, events or results. They are not
guarantees of future performance. By their nature, forward-looking
statements are subject to risks and uncertainties. Our actual results
and financial condition may differ materially from what is anticipated in
the forward-looking statements. There are many factors that could
cause actual conditions, events or results to differ from those anticipated by
the forward-looking statements contained in this Current
Report. These factors include changes in market conditions that
affect the willingness of potential investors or lenders to provide us with debt
or equity, changes in market conditions that affect the value or marketability
of assets we own, changes in market conditions or other factors that affect our
access to cash that we may need to meet our commitments to other persons,
changes in interest rates or other conditions that affect the value of mortgage
loans we have made, changes in interest rates that affect our cost of
funds, tax laws, environmental laws or other conditions that affect the value of
the real estate underlying mortgage loans we own, and changes in tax laws or
other things beyond our control that affect the tax benefits available to us and
our investors. Readers are cautioned not to place undue reliance on
forward-looking statements. We are not undertaking to update any
forward-looking statements in this Current Report.
INVESTMENTS
IN OUR COMMON STOCK
We were
organized in 1996 as a Delaware limited liability company and are classified as
a partnership for federal income tax purposes. We essentially have
the same limited liability, governance and management structures as a
corporation, but we are treated as a pass-through entity for federal income tax
purposes. Thus investors in our common shares are treated as partners
in a partnership and include their distributive share of our income, deductions
and credits on their tax returns. Annual tax information is provided
to our shareholders on Schedule K-1 rather than on Form 1099.
EXPLANATORY
NOTE
In
September 2006, we determined that our financial statements for 2004, 2005 and
the first quarter of 2006 required restatement. We completed the
restatement of our 2004 and 2005 financial statements and the audit of our 2006
financial statements last year. The audit reports related to these
financial statements were included in our Annual Report on Form 10-K for the
year-ended December
31, 2006 (the “2006 Form 10-K”), which was filed with the Securities and
Exchange Commission (“SEC”) on April 29, 2009 and is available on our website:
www.munimae.com.
Because
of the delay in completing the audited restated 2004 and 2005 financial
statements and the audited 2006 financial statements, we have not been able to
file Reports on Form 10-K or 10-Q covering any period subsequent to December 31,
2006. We have now completed the Company’s financial
statements at and for the years ended December 31, 2007, 2008 and 2009 (“the
2009 Financial Statements”), which are being filed in this Current Report on
Form 8-K in order to provide audited financial statements to our investors and
other users of our financial statements as quickly as
possible. Included with these 2009 Financial Statements is the report
of our independent registered public accounting firm, KPMG LLP, which includes
an explanatory paragraph expressing substantial doubt about our ability to
continue as a going concern due to our continued liquidity issues (see “The
Current State of Our Business” below).
We plan
to become a timely filer with the SEC as soon as practicable. Our
goal is to complete our 2010 financial statements and their related audit as
soon as practicable, which we currently estimate to be in the second quarter of
2011, after which we will file our Annual Report on Form 10-K. Our
goal is to recommence the filing of timely Quarterly Reports on Form 10-Qs
beginning with the first quarter of 2011. Our ability to accomplish
these goals will be dependent on retaining key personnel and on us continuing to
remediate our material weaknesses in internal controls over financial reporting
(see “Material Weaknesses in Internal Controls” below). Also included
in this Form 8-K is a general business update on material aspects of our
business.
THE
CURRENT STATE OF OUR BUSINESSES AND RELATED BUSINESS RISKS
Overview
At the
beginning of 2007, Municipal Mortgage & Equity, LLC operated three primary
divisions, as described below.
The Affordable
Housing Division was established to conduct activities related to
affordable housing through three reportable segments, as follows:
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Tax Credit Equity
(“TCE”) - A business that created investment funds and found investors for
such funds who received tax credits for investing in affordable housing
partnerships (these funds are called Low Income Housing Tax Credit Funds
or “LIHTC Funds”).
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·
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Affordable Bonds - A
business that originates and invests in tax-exempt bonds secured by
affordable housing.
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·
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Affordable Debt - A
business that originated and invested in loans secured by affordable
housing.
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The Real Estate
Division was established to conduct real estate finance activities
through two reportable segments, as follows:
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·
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Agency Lending - A
business that originated both market rate and affordable housing
multifamily loans with the intention of selling them to government
sponsored entities (i.e., Federal National
Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage
Corporation (“Freddie Mac”) collectively referred to as agencies
(“Agencies”) or through programs created by them, or sold permanent loans
to third party investors and the loans were guaranteed by the Government
National Mortgage Association (“Ginnie Mae”) and insured by the United
States Department of Housing and Urban Development
(“HUD”).
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·
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Merchant Banking - A
business that provided loan and bond originations, loan servicing, asset
management, investment advisory and other services to institutional
investors.
|
The Renewable
Ventures Division that financed, owned and operated renewable energy and
energy efficiency projects.
As more fully described below, the Company has either sold,
liquidated or closed down all of its different businesses, except for the
Affordable Bonds business.
Risks
and Uncertainties
The
following is a discussion of the Company’s liquidity and going concern issues
and the risks associated with the Company’s bond investing
activities.
Liquidity
and Going Concern
Beginning
in the second half of 2007, the capital markets in which the Company operates
began to deteriorate, which restricted the Company’s access to
capital. This situation was also compounded by the Company’s
inability to provide timely financial statements to creditors and
investors. The Company has experienced and continues to experience
significant liquidity issues. This lack of liquidity has resulted in
the Company having to sell assets, liquidate collateral positions, post
additional collateral, sell or close different business segments and work with
its creditors to restructure or extend debt arrangements. Since
December 31, 2006, the Company has sold its TCE, Renewable Ventures and Agency
Lending business segments. In addition, the Company has exited the
Affordable Debt and Merchant Banking business segments. MuniMae has
also sold, restructured or liquidated a significant number of bonds, loans and
other assets in order to satisfy debts and raise capital. Although
the Company has been able to extend, restructure and obtain forbearance
agreements on various debt and interest rate swap agreements, such that no
creditor has declared an event of default requiring an acceleration of debt
payments, most of these extensions, restructurings and forbearance agreements
are short-term in nature and do not provide a viable long-term solution to the
Company’s liquidity issues.
The
Company plans to continue to work with its capital partners to extend debt
maturities, restructure debt payments or settle debt at amounts below the
contractual amount due. In addition, the Company will have to
continue to reduce its operating costs in order to be a sustainable
business. All of these actions are being pursued in order to achieve
the objective of the Company continuing operations. However,
management’s objective is almost exclusively dependent on obtaining creditor
concessions, liquidating non-bond related assets and generating sufficient bond
portfolio net interest income that can be used to service the Company’s non-bond
related debt and the Company’s on-going operating expenses. However,
there can be no assurance that management will be successful in addressing
the Company’s liquidity issues. More specifically, there is
uncertainty as to whether management will be able to restructure or settle its
remaining non-bond debt in a sufficient manner to allow for the Company’s cash
flow to service this debt. There is uncertainty related to the
Company’s ability to liquidate non-bond related assets at sufficient amounts and
there are a number of business risks surrounding the Company’s bond investing
activities that could impact the Company’s ability to generate sufficient cash
flow from the bond portfolio (see “Key Risks Related to the Company’s Bond
Investing Activities”). These uncertainties could adversely impact
the Company’s financial condition or results of operations. In the
event management is not successful in restructuring or settling its remaining
non-bond related debt, or in generating liquidity from the sale of non-bond
related assets or if the bond portfolio net interest income is substantially
reduced, the Company may have to consider seeking relief through a
bankruptcy filing. These factors raise substantial doubt about the
Company’s ability to continue as a going concern.
Key
Risks Related to the Company’s Bond Investing Activities
The
Company has exposure to changes in interest rates because all of its investments
in bonds pay a fixed rate of interest, while substantially all of the Company’s
bond related debt is variable rate. A significant portion of the
Company’s variable rate exposure is not hedged by interest rate swaps or caps
and the Company does not have the credit standing to enter into any new interest
rate swaps and has limited liquidity to purchase any new interest rate
caps. A rise in interest rates or an increase in credit spreads could
cause the value of certain bond investments to decline, increase the Company’s
borrowing costs and make it ineffective for the Company to securitize its
bonds.
Substantially
all of the Company’s bond investments are illiquid, which could prevent sales at
favorable terms and make it difficult to value the bond portfolio. Our bond
investments are unrated and unenhanced and, as a consequence, the purchasers of
the Company’s bonds are generally limited to accredited investors and qualified
institutional buyers, which results in a limited trading market. This
lack of liquidity complicates how the Company determines the fair value of its
bonds as there is limited information on trades of comparable
bonds. Therefore, there is a risk that if the Company needs to sell
bonds the price it is able to realize may be lower than the carrying value
(i.e., fair value) of
such bonds. Such differences could be material to our results of
operations and financial condition.
At
December 31, 2009, substantially all of the Company’s bond investments were
either in securitization trusts or pledged as collateral for securitization
programs, notes payable or other debt. In the event a securitization
trust cannot meet its obligations, all or a portion of bonds held by or pledged
to the trust may be sold to satisfy the obligations to the holders of the senior
interests. In the event bonds are liquidated, no payment will be made to the
Company except to the extent that the sales price received for the bond exceeds
the amounts due on the senior obligations of the trust. In addition,
if the value of the bond investments within the securitization trusts or pledged
as additional collateral decreases, the Company may be required to post cash or
additional investments as collateral for such programs. In the event
the Company has insufficient liquidity or unencumbered investments to satisfy
these collateral requirements, certain bonds within the securitization trusts
may be liquidated by the third-party credit enhancer to reduce the collateral
requirement. In such cases, the Company would lose the cash flow from
the bonds and its ownership interest in them. If a significant number
of bonds were liquidated, the Company’s financial condition and results of
operations could be materially adversely affected.
Economic
conditions adversely affecting the real estate market could have a material
adverse effect on the Company. Most of the Company’s bond investments
are directly or indirectly secured by multifamily residential properties, and
therefore the value of the bond investments may be materially adversely affected
by macroeconomic conditions or other factors that adversely affect the real
estate market generally, or the market for multifamily real estate and bonds
secured by these properties in particular. These possible negative
factors include, among others: (i) increasing levels of unemployment and other
adverse economic conditions, regionally or nationally; (ii) decreased occupancy
and rent levels due to supply and demand imbalances; (iii) changes in interest
rates that affect the cost of the Company’s capital, the value of the Company’s
bond investments or the value of the real estate that secures the bonds; and
(iv) lack of or reduced availability of mortgage financing.
A
substantial portion of the Company’s bond related debt is subject to third party
credit enhancement agreements and liquidity facilities that mature prior to the
time that the underlying bond matures or is expected to be
redeemed. If the Company was unable to renew or replace its third
party credit enhancement and liquidity facilities, the Company might not be able
to extend or refinance its bond related debt. In that instance, the
Company could be subject to bond liquidations to satisfy the claims of its bond
lenders. If the Company is unable to extend or refinance its bond
related debt, whether through the extension or replacement of third party credit
enhancement and liquidity providers or through the placement of bond related
debt without the benefit of third party credit enhancement and liquidity
facilities, the Company may experience higher bond related debt
costs. If a significant number of bonds were liquidated or if bond
financing costs increased significantly, the Company’s financial condition and
results of operations could be materially adversely affected. The
Company’s total bond related debt was $809.8 million at December 31, 2009, of
which $31.0 million and $633.6 million have maturing credit enhancement
facilities in 2011 and 2013, respectively. Also, at December 31, 2009, there are
$121.5 million and $633.6 million of liquidity facilities expiring in 2011 and
2013, respectively.
Substantially
all of the Company’s bond investments are held by MuniMae TE Bond Subsidiary,
LLC (“TEB”), a subsidiary for which all of the common shares are owned directly
by the Company. Under TEB’s operating agreement with its preferred
shareholders, there are covenants related to the type of assets in which TEB can
invest, the incurrence of leverage, limitations on issuance of additional
preferred equity interests, limitations on cash distributions to MuniMae and
certain requirements in the event of merger, sale or
consolidation. At September 30, 2010:
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·
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TEB’s
leverage ratio was below the incurrence limit of 60% providing TEB the
ability to incur additional obligations of no more than
$32,000;
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·
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TEB’s
liquidation preference ratios were at amounts that would restrict it from
raising additional preferred equity on parity with the existing preferred
shares outstanding; and
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·
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TEB’s
ability to distribute cash to MuniMae is limited to Distributable Cash
Flows (TEB’s net income adjusted to exclude the impact of non-cash items)
and TEB does not have the ability to make redemptions of common stock or
distributions to MuniMae other than Distributable Cash Flows (“Restricted
Payments”) because
the current liquidation preference ratios prohibit
it.
|
On March
25, 2010, TEB entered into an amendment to its operating agreement in which TEB
agreed to accumulate and retain $25.0 million of cash flows (“Retained
Distributions”) by limiting Distributable Cash Flow distributions to MuniMae to
no more than 33% of Distributable Cash Flows until it accumulated $25.0 million
(MuniMae’s capital contributions to TEB count towards the $25.0 million of
Retained Distributions). Through this amendment, TEB also agreed not
to make any Restricted Payments to MuniMae prior to accumulating the $25.0
million of Retained Distributions. This amendment also stipulates
that Distributable Cash Flows be measured cumulatively and quarterly beginning
October 1, 2009. At September 30, 2010, TEB had accumulated the
required Retained Distributions of $25.0 million.
Beginning
in June 2009, TEB has been unable to conduct successful remarketings of its
mandatorily redeemable and perpetual preferred shares. This has
caused the distributions owed to the TEB preferred shareholders to increase
which has resulted in a reduction to the amount of TEB income that can be
distributed to the Company. If TEB continues to be
unsuccessful with future remarketings, TEB could experience additional increases
to its preferred share distributions, which would result in reductions to its
common distributions to the Company and those changes could be
material.
TEB
distributed a total of $49.7 million, $43.0 million and $30.7 million to the
Company in each of the years-ended December 31, 2009, 2008 and 2007,
respectively. The Distributable Cash Flow distributed to the Company
during the first nine months ended September 30, 2010 was $10.5
million. There can be no assurances that TEB (whose cash flows are
the primary source of cash to satisfy the Company’s non-bond related debt and
other corporate obligations) will be able to continue to distribute cash to the
Company in the future.
All of
TEB’s common stock is pledged by the Company to a creditor to support collateral
requirements related to certain debt and derivative agreements. On
December 8, 2010, the Company entered into a forbearance agreement with this
creditor (“Counterparty”) that will further restrict the Company’s ability to
utilize common distributions from TEB to satisfy non-bond related debt or cover
Company operating expenses. The key provisions of the agreement are
as follows.
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·
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Provides
for forbearance from the minimum net asset value requirement and
the financial reporting requirement contained in the interest rate
swap agreements until the earlier of June 30, 2012 or when TEB is in
compliance with its leverage and liquidation incurrence
ratios.
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·
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Requires
the Company to post a portion of the common distributions that are
remitted to the Company as follows:
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o
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For
quarterly distributions beginning in the fourth quarter of 2010 and
continuing through to the third quarter of 2011, the Company will post
with the Counterparty restricted dividends equal to fifty-percent of
common distributions less $750,000.
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o
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For
quarterly distributions beginning in the fourth quarter of 2011 and
continuing until TEB is in compliance with both its leverage ratio and
liquidation preference ratios, the Company will post restricted dividends
with the Counterparty equal to fifty-percent of common
distributions. Once TEB is in compliance with its leverage
ratio and liquidation preference ratios there will be no restrictions on
common distributions.
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The
restricted dividends are anticipated to be utilized by the Company to repurchase
and retire various perpetual and mandatorily redeemable preferred stock issued
by TEB.
TEB’s
common stock is wholly owned by MuniMae TEI Holdings, LLC (“TEI”), which is
ultimately wholly owned by MuniMae. Any unrestricted distributions by
TEB will be remitted to TEI and TEI’s ability to remit cash to MuniMae for
liquidity needs outside of TEI may be restricted due to minimum liquidity and
net worth requirements related to a TEI debt agreement. The most
restrictive covenant, a net worth requirement, requires TEI to maintain a
minimum net worth of $125 million. At September 30, 2010 and December
31, 2009, TEI’s net worth was approximately $170 million and $135 million,
respectively.
Other
Matters
As we
have become a substantially smaller business, we have significantly reduced the
number of employees. Total employees were 435 at December 31, 2008,
65 employees at December 31, 2009 and 47 employees at September 30,
2010.
In May
2008, we suspended our practice of paying quarterly dividends. We
have not paid a dividend since this suspension and do not expect to pay a
dividend for the foreseeable future.
Financial
Assets and Liabilities
As
discussed above, we have sold businesses and assets and curtailed certain
business services in order to satisfy debts and meet our liquidity
needs. We have not originated any new bond investments since the
first quarter of 2008 and we are not currently planning to do so for the
foreseeable future. We are also managing a commercial real estate
taxable loan portfolio; however, we are liquidating that portfolio over time
while retaining the bond portfolio. Information regarding the bond
business and our more significant assets and liabilities not directly related to
the bond business is provided below.
Bond
Business
The
Company primarily invests in bonds issued by state and local governments or
their agencies or authorities to finance affordable multifamily housing, student
housing and assisted living properties. These bonds are secured by an
assignment of the related mortgage loans and a general assignment of rents of
the underlying properties. Interest on the bonds is generally exempt
from federal and state income taxes. The table below
provides business volume and other key metrics related to our bond portfolio
(Note – our previously filed Current Report on Form 8-K (filed on May 27,
2010) included TEB’s bonds only as we had not completed our accounting for the
non-TEB related bonds under the United States generally accepted accounting
principles (“GAAP”)).
(dollars in thousands)
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At
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At
|
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At
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|
Bonds-Available-for-Sale
|
|
September
30, 2010
|
|
|
December
31, 2009
|
|
|
December
31, 2008
|
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Unpaid
principal balance
|
|
$ |
1,360,580 |
|
|
$ |
1,485,514 |
|
|
$ |
1,545,367 |
|
|
Fair
value
|
|
|
1,256,409 |
|
|
|
1,348,133 |
|
|
|
1,426,439 |
|
|
Total
number of bonds
|
|
|
164 |
|
|
|
172 |
|
|
|
183 |
|
|
Weighted average pay rate (1)
|
|
|
5.8
|
% |
|
|
6.1
|
% |
|
|
6.3
|
% |
|
Non-accrual bonds (UPB) (2)
|
|
$ |
141,070 |
|
|
$ |
125,686 |
|
|
$ |
27,460 |
|
|
Debt service coverage ratios on stabilized
portfolio: (1)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With
non-accrual bonds
|
|
|
1.09 |
x |
|
|
1.11 |
x |
|
|
1.14 |
x |
|
Without
non-accrual bonds
|
|
|
1.13 |
x |
|
|
1.15 |
x |
|
|
1.16 |
x |
|
Senior interests and debt owed to securitization
trusts (4)
|
|
$ |
750,755 |
|
|
$ |
809,835 |
|
|
$ |
927,852 |
|
|
Weighted
average interest pay rate at period end
|
|
|
1.60
|
% |
|
|
1.87
|
% |
|
|
3.16
|
% |
|
Notes
payable and other debt
|
|
$ |
77,187 |
|
|
$ |
125,385 |
|
|
$ |
32,192 |
|
|
Weighted
average interest pay rate at period end
|
|
|
6.62
|
% |
|
|
9.75
|
% |
|
|
7.50
|
% |
|
Preferred stock (par amount) (5)
|
|
$ |
334,281 |
|
|
$ |
339,364 |
|
|
$ |
341,000 |
|
|
Weighted
average distribution rate at period end
|
|
|
6.55
|
% |
|
|
6.56
|
% |
|
|
6.21
|
% |
|
(1)
|
|
Calculated
on a rolling 12-month period basis.
|
|
|
|
|
|
(2)
|
|
Non-accrual
bonds represent bonds past due 90 days in the payment of principal or
interest.
|
|
|
|
|
|
(3)
|
|
Stabilized
portfolio represents properties that have reached 90% occupancy for 90
days and have sufficient operating information to calculate a rolling
12-month debt service coverage ratio. This operating information is
generally received on a quarter lag basis; accordingly, the debt
service coverage ratio for September 30, 2010 is based on June 30, 2010
operating information, while the ratios for December 31 are based on the
previous September 30 operating information.
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|
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(4)
|
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This
debt is primarily due to bond securitization transactions that are treated
as financing arrangements in accordance with GAAP. This debt balance also
includes transactions whereby the Company purchases subordinate
certificates from trusts having never owned the underlying
bonds. Our bond securitizations are accounted for as secured
borrowings and most securitization trusts are consolidated as we are
deemed to be the primary beneficiary. Creditors of such trusts have
limited recourse to our general credit. At September
30, 2010, the Company is current with respect to interest and
principal payments that are due.
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(5)
|
|
This
preferred stock was issued by TEB, which is current with respect to
principal redemptions and distributions. At September 30, 2010,
December 31, 2009 and December 31, 2008, these amounts include $156.1
million, $160.9 million and $162.3 million, respectively, of mandatorily
redeemable shares that we classify as debt in accordance with
GAAP.
|
Due to
the lack of liquidity within the securitization market, the Company has sold or
permitted the early redemption of a number of bonds within its bond portfolio
since mid-2008 in order to generate liquidity for future funding commitments and
general corporate needs, eliminate future funding commitments, reduce leverage,
and improve overall credit quality. These culling efforts, which
included the sales of non-accrual bonds, mitigated some of the negative effects
of the worsening economic and multifamily market conditions on our bond
portfolio through the first half of 2009. Since then, and into early
2010 the apartment market continued to deteriorate as a result of a weak economy
and the continued high national unemployment rate which negatively impacted the
performance of the bond portfolio, particularly as evidenced by the growth in
the number of bonds on non-accrual. The weak apartment market has
also contributed to the decline in property level financial support historically
provided by both property developers and tax credit equity
syndicators. In recent months market analysts have reported improving
apartment market conditions and performance, as well as increased optimism among
property developers and managers. While improvement is not evident in
the metrics the Company uses to track the performance of its bond portfolio, it
does appear that performance has bottomed out and leveled off; however, reduced
property level support by developers and tax credit syndicators may result in
continued growth in the number of non-accrual bonds in 2011.
At
September 30, 2010, approximately $1.2 billion, or 97.9% of the fair value of
our bonds were either deposited in securitization trusts or pledged as
collateral for securitization programs. The Company had no unfunded
bond lending commitments at September 30, 2010. During 2010, the
Company has experienced an increase in net interest income from the bond
portfolio due to a decrease in our variable rate based debt
expense. Approximately 95.4%, or $716.0 million of the September 30,
2010 securitized bond related debt is variable rate debt based on the Securities
Industry and Financial Markets Association (“SIFMA”) index. Our total
weighted average pay rate on variable rate debt (which includes interest plus
on-going fees such as credit enhancement, liquidity, trustee, custodial and
remarketing fees) at December 31, 2008 and 2009 was 3.08% and
1.96%, respectively. The total weighted average pay rate on
variable rate debt was 1.85% as of September 30, 2010. A rise in the
SIFMA index will increase our borrowing costs without a corresponding increase
in our bond interest income. Depending on the magnitude of the rise
in short-term interest rates, there could be a significant reduction in our net
interest income. Conversely, a decline in the SIFMA index will lower
our borrowing costs.
As
previously disclosed, on March 6, 2008 the Company and certain of its
subsidiaries entered into a series of agreements pursuant to which the Company
granted a security interest in the common shares of TEB in order to avoid the
need of the Company and other MuniMae subsidiaries to post additional cash
collateral to meet future margin calls on various swap obligations. Under the
agreements, the Company and its affiliates receive credit against margin
requirements without the need to post additional cash.
In
addition to the risks described herein, we refer you to the section entitled
“Risk Factors” in Item 1A of the 2006 Form 10-K.
Assets
Outside of the Bond Business
Taxable
Loans
The
Company’s taxable lending business historically consisted primarily of loans
related to the affordable multifamily housing market, origination and sales of
multifamily loans through the Fannie Mae, Freddie Mac and certain HUD insured
multifamily lending programs and commercial real estate lending on a variety of
asset types. We have sold the Agency Lending business and therefore
we no longer originate and sell these types of loans. The Merchant
Banking business segment has effectively been shut down due to the severe market
conditions that we experienced in the past three
years. Therefore, we currently have no employees engaged in taxable
loan originations; however, as of September 30, 2010 we are managing and
servicing approximately 52 loans that we own. Relevant information
related to the taxable loan portfolio is as follows:
(dollars in
thousands)
|
|
|
At
or for
|
|
|
At
or for
|
|
|
At
or for
|
|
|
|
|
the
nine months ended
|
|
|
the
year ended
|
|
|
the
year ended
|
|
|
|
|
September
30, 2010
|
|
|
December
31, 2009
|
|
|
December
31, 2008
|
|
|
|
|
Unpaid
Principal
|
|
|
Carrying
|
|
|
Unpaid
Principal
|
|
|
Carrying
|
|
|
Unpaid
Principal
|
|
|
Carrying
|
|
|
Loan
Portfolio
|
|
Balance
(1)
|
|
|
Value
(2)
|
|
|
Balance
(1)
|
|
|
Value
(2)
|
|
|
Balance
(1)
|
|
|
Value
(2)
|
|
|
Loans
held for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
$ |
18,551 |
|
|
$ |
17,862 |
|
|
$ |
49,672 |
|
|
$ |
45,818 |
|
|
$ |
67,861 |
|
|
$ |
65,866 |
|
|
Permanent
|
|
|
20,496 |
|
|
|
4,941 |
|
|
|
23,268 |
|
|
|
10,424 |
|
|
|
37,500 |
|
|
|
35,622 |
|
|
Bridge
|
|
|
2,086 |
|
|
|
- |
|
|
|
3,260 |
|
|
|
- |
|
|
|
128,312 |
|
|
|
123,454 |
|
|
Other
|
|
|
35,776 |
|
|
|
8,682 |
|
|
|
34,032 |
|
|
|
7,779 |
|
|
|
30,329 |
|
|
|
17,364 |
|
|
Total
loans held for sale, net
|
|
$ |
76,909 |
|
|
$ |
31,485 |
|
|
$ |
110,232 |
|
|
$ |
64,021 |
|
|
$ |
264,002 |
|
|
$ |
242,306 |
|
|
Loans
held for investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
$ |
48,951 |
|
|
$ |
41,252 |
|
|
$ |
56,962 |
|
|
$ |
53,720 |
|
|
$ |
87,989 |
|
|
$ |
77,592 |
|
|
Permanent
|
|
|
3,531 |
|
|
|
3,483 |
|
|
|
3,668 |
|
|
|
3,618 |
|
|
|
3,823 |
|
|
|
3,768 |
|
|
Bridge
|
|
|
17,920 |
|
|
|
6,668 |
|
|
|
17,184 |
|
|
|
6,663 |
|
|
|
81,022 |
|
|
|
31,304 |
|
|
Other
|
|
|
19,157 |
|
|
|
1,791 |
|
|
|
19,332 |
|
|
|
1,957 |
|
|
|
20,225 |
|
|
|
2,371 |
|
|
Total
loans held for investment, net
|
|
$ |
89,559 |
|
|
$ |
53,194 |
|
|
$ |
97,146 |
|
|
$ |
65,958 |
|
|
$ |
193,059 |
|
|
$ |
115,035 |
|
|
Total
loans
|
|
$ |
166,468 |
|
|
$ |
84,679 |
|
|
$ |
207,378 |
|
|
$ |
129,979 |
|
|
$ |
457,061 |
|
|
$ |
357,341 |
|
|
Loans
past due 90 days
|
|
$ |
88,971 |
|
|
$ |
16,314 |
|
|
$ |
100,628 |
|
|
$ |
32,313 |
|
|
$ |
157,516 |
|
|
$ |
64,611 |
|
|
Weighted
average rate at period end:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
loan portfolio - contractual rate
|
|
|
7.94 |
% |
|
|
|
|
|
|
7.80 |
% |
|
|
|
|
|
|
7.70 |
% |
|
|
|
|
|
Loans
past due 90 days - pay rate
|
|
|
0.62 |
% |
|
|
|
|
|
|
2.06 |
% |
|
|
|
|
|
|
4.98 |
% |
|
|
|
|
|
Total
loan count
|
|
|
52 |
|
|
|
|
|
|
|
50 |
|
|
|
|
|
|
|
76 |
|
|
|
|
|
|
(1)
|
These
amounts are contractual unpaid principal balances and do not reflect any
impairment or loss reserves.
|
|
(2)
|
These amounts represent the
Company’s carrying basis under GAAP. Loans held for sale are carried at
the lower of cost or market, including market adjustments for credit
deterioration. Loans held for investment primarily represent
loans sold to third parties that did not meet the requirements for sales
treatment under GAAP due to our continuing involvement, such as guarantees
or other forms of support. These loans are evaluated for
impairment and if impaired the Company will provide for specific
impairment as part of its allowance for loan
losses.
|
As shown
in the table above, we have disaggregated our taxable loan portfolio into four
categories as follows.
|
|
·
|
Construction loans are
short-term or interim financing provided primarily to builders and
developers of multifamily housing and other property types for the
construction and lease-up of the
property.
|
|
|
·
|
Permanent loans are
used to pay off the construction loans upon the completion of construction
and lease-up of the property or to refinance existing stabilized
properties.
|
|
|
·
|
Bridge loans are
short-term or intermediate term loans secured with either a first mortgage
position or a subordinated position. These loans are used primarily to
finance the acquisition and improvements on transitional properties until
their conversion to permanent
financing.
|
|
|
·
|
Other loans are
primarily pre-development loans and land or land development
loans. Pre-development loans are loans to developers to fund
up-front costs to help them secure a project before they are ready to
fully develop it. Land or land development loans are used to
fund the purchase or the purchase and costs of utilities, roads and other
infrastructure and are typically repaid from lot
sales.
|
At
September 30, 2010, the overall credit quality of the taxable loan portfolio is
weak as evidenced by its high percentage of loans (53%) on non-accrual and low
carrying value as a percentage of the contractual balance due
(51%). However, credit quality varies widely by the loan type
with construction/permanent loans, which are typically secured by mortgages on
apartment properties, performing the best and other loans, principally land/land
development, performing most poorly. The overall credit quality of
the Company’s taxable loan portfolio has declined over the last several years as
the Company exited the taxable lending business and is liquidating its holdings
with emphasis on those loan sales that could be realized at par or close to
par. Management believes the carrying values set forth above are
realizable based on current market and borrower conditions.
Other
Assets
Preferred Stock
from Agency Lending Business Sale — We
received three series of preferred stock from the purchaser of the Agency
Lending business having a par amount of $47.0 million: Series A units of $15.0
million, Series B units of $15.0 million and Series C units of $17.0 million,
which entitles the Company to receive cumulative quarterly cash distributions at
annualized rates of 17.5%, 14.5% and 11.5% per year, respectively. At
September 30, 2010, the current principal amount of the three series of
preferred stock is $44.0 million. As part of the purchase and sale
agreements we have agreed to reimburse the purchaser up to a maximum of $30.0
million over the first four years after the sale date (i.e., May 15, 2013), for
payments the purchaser may be required to make under loss sharing arrangements
with Fannie Mae and other government-sponsored enterprises or agencies with
regard to loans they purchased from us. This reimbursement obligation
will be satisfied by cancellation of Series C Preferred units and then Series B
Preferred units, rather than by cash. In addition, the Company is
obligated to fund losses on specific loans identified at the sale date that are
not part of the $30.0 million loss reimbursement. The Company
deposited $2.3 million in an escrow account with the purchaser as support for
this potential obligation. At September 30, 2010, the estimated fair
value of the preferred stock, which includes the embedded loss sharing guarantee
to the purchaser, was $37.1 million. The estimated liability related to the
indemnification on the specifically identified loans was $0.4 million at
September 30, 2010, versus an escrow balance of $0.5 million. From
the sale date of the Agency Lending business to September 30, 2010, we have
incurred $2.2 million in realized losses under these loss sharing
arrangements. Of this amount, $1.0 million was paid through the
cancellation of $1.0 million (par amount) of the Series C Preferred units and
$1.2 million was paid from the $2.3 million escrow account. Separate
from the loss sharing arrangements and pursuant to the Series C agreement, $2.0
million of Series C Preferred units were redeemed as a result of the Company’s
release from certain letters of credit. The three series of preferred
stock are performing according to their terms at September 30,
2010.
Tax Credit Equity
Business — We
retained the general partner interests in 14 LIHTC funds that invest in
affordable housing projects. In addition, the Company has retained
various contingent obligations related to these funds and other funds that were
sold. The Company’s employees that performed the asset management,
accounting and other services related to these funds were acquired by the buyer
of the business, and we have contracted with the buyer to provide the on-going
services necessary to manage the funds that we did not sell. Although
the Company’s economic interest in these 14 funds is limited to its 0.01%
general partner interest, we consolidate 11 of these funds along with two
sold funds where we have on-going contingent obligations because we are
considered the primary beneficiary of these funds. This results in a
substantial amount of assets and non-controlling interests being included on our
consolidated balance sheet; however, our economic benefit related to these
assets is nominal. Also, at September 30, 2010, our exposure related
to all of these contingent obligations is estimated to be zero.
Real Estate
Owned (“REO”) — At September
30, 2010, we have three properties where we have either foreclosed or taken a
deed-in-lieu of foreclosure. Two of these properties are undeveloped land
that was to be developed into mixed use developments. Before
foreclosure or taking a deed-in-lieu of foreclosure, we provided financing to
these properties of $80.7 million. Subsequent to funding these loans
and after foreclosure, we recorded loan and REO losses of $68.1 million related
to these investments. At September 30, 2010, we have an asset
value of $12.6 million for these three properties.
Renewable Energy
Business — The
Company sold substantially all of its interests in the Renewable Energy business
segment, except for its interest in two solar funds and two solar
projects. We also retained a biomass facility, which we have sold at
a net loss of $5.3 million. Our
economic interest in the two solar funds is nominal and the carrying value of
the two remaining projects at December 31, 2009 was zero, which is net of a
$15.5 million impairment charge due to recoverability concerns.
Other
Assets — We
continue to own equity investments in several partnerships in our real estate
investment business, including GP Take Backs (property partnerships where we
replaced the general partner due to performance or other issues) and we have a
majority position in International Housing Solutions S.a.r.l., a partnership
that was formed to promote and invest in affordable housing in overseas
markets. We actively manage International Housing Solutions S.a.r.l.,
in which we have invested $2.2 million after exercising an option to take
management control. We also have a 2.82% co-investment requirement
with respect to our role as the general partner to the South Africa Workforce
Housing Fund SA I. The total equity funding commitment is $5.1
million, of which $2.0 million has been funded at September 30,
2010. Except for International Housing Solutions S.a.r.l., we believe
the other real estate partnership investments have nominal economic value to us
at this point.
Debt
and Liabilities Outside the Bond Business
The table
below lists our debt outside of the bond business at September 30, 2010,
December 31, 2009 and 2008. Certain of our debt agreements are
subject to financial reporting and other related covenants that we are not in
compliance with due to our inability to provide timely audited financial
statements. Also, in some cases, we are not in compliance with the principal
payment terms of the agreements; however, in these cases we have either extended
the debt or have short-term forbearance agreements in place with
creditors. The Company is current with respect to required interest
payments to its creditors. Our liquidity issues have persisted since
early 2008 and we have been able to successfully work with our creditors since
then; however, we cannot provide assurance that we will be able to meet all of
our obligations as and when they come due. We will need to continue
to negotiate with our creditors and reduce or restructure our outstanding debt,
including obtaining concessions on debt payments.
(dollars
in thousands)
|
|
|
Contractual
Amount
|
|
|
Weighted
Average
|
|
|
|
|
Outstanding
at
|
|
|
Contractual
Interest Rate at
|
|
|
Type of Debt
|
|
September 30, 2010
|
|
|
September 30, 2010
|
|
|
Notes
payable and other debt
|
|
$ |
139,031 |
|
|
|
7.79 |
% |
|
Lines
of credit
|
|
|
4,190 |
|
|
|
6.00 |
|
|
Subordinated
debt (1)
|
|
|
180,854 |
|
|
|
8.81 |
|
|
Total
debt outside the bond business
|
|
$ |
324,075 |
|
|
|
8.34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual
Amount
|
|
|
Weighted
Average
|
|
|
|
|
Outstanding
at
|
|
|
Contractual
Interest Rate at
|
|
|
Type of Debt
|
|
December 31, 2009
|
|
|
December 31, 2009
|
|
|
Notes
payable and other debt
|
|
$ |
176,704 |
|
|
|
5.91 |
% |
|
Subordinated
debt (1)
|
|
|
175,127 |
|
|
|
8.83 |
|
|
Total
debt outside the bond business
|
|
$ |
351,831 |
|
|
|
7.36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual
Amount
|
|
|
Weighted
Average
|
|
|
|
|
Outstanding
at
|
|
|
Contractual
Interest Rate at
|
|
|
Type of Debt
|
|
December 31, 2008
|
|
|
December 31, 2008
|
|
|
Notes
payable and other debt
|
|
$ |
337,661 |
|
|
|
6.04 |
% |
|
Lines
of credit
|
|
|
123,076 |
|
|
|
6.46 |
|
|
Subordinated
debt (1)
|
|
|
175,500 |
|
|
|
8.65 |
|
|
Total
debt outside the bond business
|
|
$ |
636,237 |
|
|
|
6.84 |
% |
|
(1)
|
Approximately
$134.8 million (original par) of this debt was restructured and the par
amount was increased and the interest rate was reduced for a period of
time. The increased par amount on the restructured debt was
treated as a discount on the debt and accreted as additional interest
expense over the life of the debt. At September 30, 2010, the
effective interest rate was 8.81% as compared to a pay rate of
2.08%.
|
Notes Payable and
Lines of Credit — This
debt is primarily related to secured borrowings collateralized by various
assets, primarily real estate notes held by us and secured by commercial real
estate projects. In most cases the Company has guaranteed the debt or
is the direct borrower.
Subordinated Debt
— This
debt was originally issued in 2004 and 2005 at a par amount of $172.8 million by
trusts owned by our indirect wholly owned subsidiary, MMA Financial Holdings,
Inc. (“MFH”). MFH and MuniMae guaranteed this debt, which therefore
represents a general obligation of the Company, but it is not secured by any
specific assets of the Company. This debt is owned by various
investors and certain portions of this debt were modified as
follows:
|
|
o
|
|
On
November 3, 2009, the Company exchanged $30.0 million of subordinated debt
for subordinate debt issued by one of our wholly owned subsidiaries, MMA
Mortgage Investment Corporation (“MMIC”). Other than the
issuer, the terms and conditions of this debt are the same as that issued
by MFH.
|
|
|
o
|
Approximately $8.0 million has
been repurchased and retired by the Company. The total purchase
price was $1.0 million.
|
|
|
o
|
Approximately
$134.8 million of the original par amount has been renegotiated with the
holders to increase the outstanding principal amount from $134.8 million
to $166.7 million, while reducing the interest rate from a weighted
average of 8.42% to 0.75% for three years. Beginning in the
first quarter of 2012, the interest rate reverts back to the original
rate.
|
Other Liabilities
and Contingencies - The most significant other liabilities are exposures
related to interest rate swaps and accounts payable to vendors. We
have interest rate swaps totaling approximately $332.5 million (notional) at
September 30, 2010 that were entered into primarily to hedge the interest rate
risk on the bond portfolio. The fair value of these interest rate
swaps was a net liability of $16.9 million at September 30,
2010.
Our total
accounts payable and accrued expenses at September 30, 2010 were approximately
$19.2 million. This amount included the following: approximately $7.6
million of accrued (but not due) interest expense on our debt and swaps and
distributions on TEB’s preferred shares; approximately $6.0 million of accrued
facilities expenses, salaries and benefits and general operating expenses and
$5.6 million of accrued consulting and legal expenses.
Common
Shareholders’ Equity
The
Company’s consolidated common shareholders’ equity was $668 million at December
31, 2006. Since December 31, 2006 we have experienced substantial
losses resulting from business unit sales and liquidations and sales of assets
and write downs on loans and investments, including write-offs of goodwill and
other intangible assets, and costs related to the preparation and audit of the
Company’s financial statements. The Company’s asset losses were the
result of the changes in the capital markets and the economy in general, which
significantly impacted us. Due to our lack of liquidity, we were
forced to sell assets and businesses at a time of unfavorable market conditions
when there were very few buyers. As a result of these costs and
losses the Company’s shareholders’ equity is a net deficit at December 31, 2009
of $41.9 million.
2010
Investor Tax Information
IRS
Circular 230 Disclosure
Any
U.S. tax advice contained in the body of this document was not intended or
written to be used, and cannot be used, by the recipient for the purpose of
avoiding penalties that may be imposed under the Internal Revenue Code or
applicable state or local tax law.
The
Company is a publicly traded partnership and as such, all of the taxable income
and loss we receive or generate at the parent company is allocated to our common
shareholders. Allocations of income and capital gain potentially
create a tax liability for our shareholders regardless of whether the Company
has made any cash distributions. With respect to capital transactions
in particular (e.g., the purchase, sale or payoff of bonds), the income or loss
allocated to our common shareholders does not necessarily relate to whether the
Company had a gain or loss, but rather to each investor's specific basis in
their shares. Depending on when and at what price investors acquired
our shares, certain investors may have capital gains allocated to them due to
their low basis in our stock, while other investors with a higher basis receive
an allocation of capital losses for the same transactions regardless of whether
we, as a Company, had a gain or loss for those transactions. Those
investors who bought our shares at a low price (generally, shares purchased
after January 2008) will typically have capital gains allocated to them while
those who bought our shares at a higher price (generally, shares purchased prior
to January 2008) will typically have capital losses allocated to
them. These allocations, in turn, can affect an investor's basis
going forward, which can result in a reversal of the tax consequences upon a
sale by the investor of his or her shares. The allocation of income,
deduction, and capital gain (or loss) will continue without regard to cash
distributions. INVESTORS SHOULD CONSULT THEIR PERSONAL TAX ADVISORS
for the appropriate treatment of the income or loss on their individual tax
return and the effect of such allocations on the tax basis of their
shares.
During
the first nine months of 2010, we executed capital transactions consisting
primarily of sales of tax-exempt bonds and taxable loans. Based on
this activity, shareholders can expect similar capital gain (or loss) activity
as reflected in prior years. The allocation of capital gain (or loss)
is highly dependent on an individual’s personal circumstance, including the date
the shares were acquired and the type of account used to hold the
shares. A shareholder that acquired his shares after January 2008 may
have significant capital gains reported on his 2010 year-end Schedule K-1,
although the final amount could vary significantly and will depend on our fourth
quarter results and an individual shareholder’s circumstances. It is
anticipated that investors who have purchased shares prior to January 2008
should have capital losses allocated to them, although the final amount could
vary significantly and will depend on our fourth quarter results and an
individual shareholder’s circumstances. If an investor owns units
that fall into both categories, a separate calculation for each group of units
should be done and then aggregated to determine estimated taxable capital gain
(or loss). We are unable to project the ultimate capital gain (or
loss) attributable to an investor who actively traded their units during 2010
until we do the final tax accounting after year-end 2010.
In
addition, the Company may have additional transactions during the fourth quarter
that may also directly impact the amount of capital gain (or loss) allocated to
shareholders. Final allocations will vary based on the additional
fourth quarter activity and a shareholder’s individual
circumstance. INVESTORS SHOULD CONSULT THEIR PERSONAL TAX ADVISORS in
order to fully understand the tax impact of owning shares of the
Company.
SEC
Matters
The
Company is working to become current in its SEC periodic filings; our goal is to
have audited financial statements for the year-ended 2010 completed as soon as
practicable, which we estimate to be during the second quarter of 2011, and we
will file our 2010 Annual Report on Form 10-K as soon as possible
after the audit is completed. Our goal is to begin filing timely
Quarterly Reports on Form 10-Q beginning with the period ending March 31,
2011. Until we become current in our financial reporting, we are at
risk that the SEC may seek to de-register or suspend trading in our
shares. We have received correspondence from the SEC noting the
Company’s status as a non-current filer and advising the Company that it could,
in the future, be subject to an administrative proceeding to revoke the Exchange
Act registration of our common shares and/or an order, without further notice,
suspending trading of our common shares. If the registration of our
common shares is revoked or if trading is suspended, our common shares would no
longer be quoted on the Pink Sheets and the public trading of our common shares
effectively would be terminated. If there is no longer a public
trading market for our common shares, investors would find it difficult, if not
impossible, to buy or sell common shares publicly or to obtain accurate
quotations for prices at which common shares may be purchased or
sold. As a result of the absence of a public market for our common
shares, the price of such shares would likely decline. In response to
the SEC’s correspondence, we have advised the SEC of the extraordinary events of
the last several years and of our diligent efforts to rectify our filing
deficiencies. We are not aware of whether or when the SEC might take
these or any other actions that would adversely affect the Company and our
shareholders. We will do our best to work with the SEC, but cannot
provide assurance that the SEC will not take action with respect to us or our
common shares.
Material
Weaknesses in Internal Controls
Management
is responsible for establishing and maintaining adequate internal control over
financial reporting and effective disclosure controls and procedures as defined
by Rules 13a-15(e), Rules 13a-15(f) and 15d-15(e) under the Exchange
Act. Management is
required to do an assessment of the effectiveness of the Company’s disclosure
controls and procedures and of the Company’s internal control over financial
reporting. Due to the inability to file timely financial reports for
any period since 2005 and based on the magnitude of the restatement adjustments
to the Company’s previously filed 2004 and 2005 financial statements (including
a cumulative adjustment to stockholders’ equity at January 1, 2004), management
did not complete its assessment as of December 31, 2006 and concluded that there
were material weaknesses in the Company’s internal control over financial
reporting (See Part 9a of the Company’s 2006 Form 10-K). For 2007,
2008 and 2009 and through the date hereof, the Company continues to be unable to
prepare financial statements on a timely basis and the internal control
weaknesses that were identified in the 2006 Form 10-K continue to exist as of
today. Therefore, the Company did not complete its assessment
of internal control over financial reporting related to the
2007, 2008 and 2009 financial statements; however, the Company will report on
its material weaknesses and remediation efforts as part of the 2010 Annual
Report on Form 10-K. The Company believes it can make substantial progress on
addressing the identified material weaknesses (identified in the Company’s 2006
Form 10-K) due to the significant reduction in the Company’s businesses,
resulting in less complexity to the Company’s accounting model and due to
improved continuity of its accounting staff.
Due to
identified material weaknesses in our evaluation of internal control over
financial reporting, we implemented additional procedures and reviews that we
believe are sufficient to ensure that our consolidated financial statements, for
the years-ended December 31, 2007, 2008 and 2009, are presented in
accordance with GAAP. These procedures include, among other things, evaluating
and documenting all applicable accounting policies related to our businesses,
evaluating the application of such accounting policies, re-measuring our
financial reporting results under these policies, performing analytical reviews
and substantiating journal entries to source documents. In addition,
we conducted a number of meetings involving senior executives of the Company to
ensure the completeness and accuracy of the financial statements and related
disclosures.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
The
exhibit to this report is listed in Item 7.01 above and in the Exhibit Index
that follows the signature line.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Municipal
Mortgage & Equity, LLC
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December 9,
2010
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By:
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/s/
Michael L. Falcone
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Name:
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Michael
L. Falcone
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Title:
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Chief
Executive Officer and President
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Exhibit
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Number
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Description
of Exhibit
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99.1
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Copy
of the press release labeled “MuniMae Announces Filing of Form 8-K and
Schedules Conference Call”
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99.2
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Consolidated
financial statements of Municipal Mortgage & Equity, LLC as of and for
the years ending December 31, 2007, 2008 and
2009.
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