AMC Entertainment Holdings Inc. (NYSE:AMC)
Industry: Services

American Mortgage Acceptance Company is a real estate investment trust that focuses on originating and acquiring mortgages secured by commercial properties with a focus on the multifamily sector. The mortgages may take the form of government-insured first mortgages, insured mortgage pass-through certificates or insured mortgage-backed securities and uninsured mezzanine loans, construction loans, and bridge loans. In addition, the Company has indirectly invested in subordinate commercial mortgage-backed securities and may invest in other real estate assets, including non-multifamily mortgages. In association with its investing activities, American Mortgage Acceptance may also issue guarantees of construction and permanent financing and make standby loan commitments. Government Insured and Guaranteed Investments The Company's declaration of trust requires that 40% of its new investments be of the type it originally invested in prior to its reorganization in 1999. Generally, the Company seeks to maintain a minimum of 40% of its investments in government insured or guaranteed investments, primarily through the acquisition of Government National Mortgage Association and Federal National Mortgage Association mortgage-backed securities and pass-through certificates. Mezzanine Loans The Company originates or acquires mezzanine loans that typically finance newly stabilized or transitional commercial real estate properties. While it focuses on the multifamily sector, the Company may originate mezzanine loans for office, retail or industrial properties as well. The interest rates it offers are either fixed or floating rate. American Mortgage Acceptance seeks properties in real estate markets with capitalized developers or guarantors. It sources mezzanine loans in several ways, including issuing mezzanine debt behind an existing first mortgage loan; jointly bidding with a senior lender and closing simultaneously (can be seamless to the client); acquiring a mezzanine loan from a senior lender or originating the entire debt structure and selling the first mortgage to a senior lender. Mezzanine loans are subordinate to senior mortgages and may include a participating component, such as a right to a portion of the cash flow and proceeds generated from the refinancing and sale of the underlying properties. Typically, they are secured by equity interests in the borrower and have limited recourse to the borrower. Bridge Loans The Company has two bridge loan programs. In the first, loans are typically funded in connection with the development of multifamily properties that benefit from the Low-Income Housing Tax Credit (LIHTC) program. Due to the typical equity payment schedule associated with the LIHTC program, there can be periods in a construction cycle, where a developer needs short-term capital and the Company offers bridge loans to developers with typical terms of 12 months, which are collateralized by the equity interests in the property owner. In the second program, the Company provides loans for properties undergoing rehabilitation by new owners, when the rehabilitation process will add value to the property and reduce the loan-to-value ratio and risk of loss. Its bridge loans may include a participation component. Commercial Mortgage-Backed Securities (CMBS) The Company invests indirectly in CMBS through a convertible preferred equity investment in ARCap Investors, LLC (ARCap). ARCap specializes in investing in non-investment grade and unrated subordinated CMBS. The CMBS, which consists of ARCap's portfolio, are collateralized by a range of underlying properties, including multifamily, retail, office and hotel. First Mortgage Revenue Bonds American Mortgage Acceptance invests in taxable revenue bonds that are secured by first mortgages on affordable multifamily housing properties throughout the country. The proceeds from these revenue bonds are generally used for the new construction or substantial rehabilitation of affordable multifamily properties. Other Investments From time to time, the

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As Of: 08/16 13:13 ET
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