Greystone Housing Impact Investors LP Q3 FY2024 earnings call

• The quarter saw a net loss of $0.23 per unit and $0.27 CAD per unit. Net loss was impacted by $9.7 million noncash unrealized losses on interest rate derivatives.
• Interest rate swap portfolio has a weighted average remaining term of ~3 years; fair value declined due to SOFR swap rate decrease, but expected minimal impact on net cash flows.
• Mortgage revenue bond portfolio fair value increased due to tax exempt rate decrease.
• Investment portfolio: no forbearance requests for multifamily mortgage revenue bonds; physical occupancy 91.5% for stabilized portfolio. Joint venture equity investments in Vantage and others with leasing activity and construction progress.
• Terminated variable rate M31 TEBS financing and closed fixed rate 2024 PFA securitization transaction, reducing interest rate risk.
• Outstanding future funding commitments for mortgage revenue bonds, etc., totaled $160.2 million; remaining funding commitments for JV equity investments $37.7 million.

The Partnership reported a GAAP basis net loss of $4.6 million and $0.23 per unit. Cash available for distributions (CAD) was $6.2 million or $0.27 per unit. The investment portfolio includes $1.32 billion of affordable multifamily investments (mortgage revenue bonds, governmental issuer loans, property loans) and $169 million in joint venture equity investments. The mortgage revenue bond portfolio makes up 85% of total assets. For the mortgage revenue bond portfolio, 29% of the portfolio value relates to properties in California, 26% in Texas, and 18% in South Carolina. The book value per unit as of September 30th was $14.15, an increase of $0.17 from June 30th.

• Expect minimal impact on net cash flows from interest rate derivative fair value decline as swap settlement payment declines offset by interest cost savings on variable rate debt.
• Plan to fund outstanding future funding commitments over ~18 months and redeploy redemption proceeds from nearing maturity investments.
• Excited about deploying capital from joint venture with BlackRock for construction lending, aiming to put new lending capacity to work.

• Interest rate volatility could impact fair value of interest rate derivatives and net interest income.
• Regulatory changes or legislative shifts could affect affordable housing programs like Low-Income Housing Tax Credit.
• Market conditions could impact demand for loans and new issuance in the municipal bond market.

Q: With the new change in administration happening next year, are there any foreseeable issues that you see within fiscal policy that might affect current credit or new issuance?

A: It's too early to tell pending house race results. Historically, bipartisan support for Low-Income Housing Tax Credit program, but legislative changes and sunsetting of 2017 Tax Cuts and Jobs Act provisions may impact.

Q: How do you envision deploying capital from the BlackRock partnership?

A: Offering fixed and floating rate construction loans to be taken out by Freddie Mac TEL forward permanent loan; using dedicated pool of capital to fund loans instead of Partnership's balance sheet directly.

Q: Recent rate volatility, how impacted demand for loans?

A: Interest rates haven't significantly impacted core lending products; sponsors still have allocations and are finding ways to pencil deals. Inbound inquiry continues.

Q: Book value 14.15 and stock price lower, make sense to do share buybacks?

A: Prefer making accretive investments over share buybacks as long as returns from new investments are accretive to current dividend yield.

Q: Any chance insiders purchase stock at these prices?

A: Insider window closed in advance of 10-Q filing, will see if window opens after today's announcement.