Multifamily Finance Bond Expert Red Capital Structures and Buys Direct Purchase Bond Transaction; New Approach Benefits Affordable Seniors Project in Ohio

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RED CAPITAL GROUP entities structure innovative and highly cost-effective tax-exempt bond structure to benefit construction of an affordable seniors housing project near Cincinnati, OH.

The Reserve on South Martin

As a result of the innovative structure, negative arbitrage expenses are greatly reduced for the project sponsor.

Red Capital Markets, LLC (MEMBER FINRA/SIPC), the investment banking arm of comprehensive capital provider RED CAPITAL GROUP, LLC (“RED”) and a leading multifamily bond underwriter, announced the use of a proprietary structure it created and recently deployed for The Reserve on South Martin, a 60-unit affordable housing project that is being built in Mt. Healthy, near Cincinnati, Ohio.

Tax-exempt financing structured by Red Capital Markets, LLC (“Red”) for The Reserve on South Martin utilized a proprietary approach that was developed by Red to streamline transaction costs and improve efficiency. Red’s Bonds DirectSM structure involves a commitment by related entity Red Capital Partners, LLC (“RCP”) to purchase the entire $6,000,000 bond issue on a draw-down basis as required by the demands of the construction schedule.

As a result of the innovative structure, negative arbitrage expenses are greatly reduced for the project sponsor. Also, due to RCP’s direct purchase and RED’s other in-house servicing capabilities, the need for bond trustee and rating agency fees was eliminated, thereby reducing costs of issuance expenses to the benefit of the project sponsor. The bonds issued by the Ohio Housing Finance Agency have a 22-month maturity and although the construction phase is expected to be complete in the fall of 2012, the bonds are pre-payable any time at par.

The project sponsor is Cincinnati Metropolitan Housing Authority (“CMHA”), who also is serving as the Developer, General Partner and Management Agent for the community. CMHA’s interim executive director, Ted Bergh said, “Low income seniors struggle to find affordable housing solutions they can afford on fixed incomes. The Reserve on South Martin will meet a critical need in the community and will make a positive impact on the Mt. Healthy neighborhood.”

In addition to bond proceeds and $1.2 million in Low Income Housing Tax Credit proceeds, CMHA was awarded $10.3 million Neighborhood Stabilization Program II grant monies as part of a larger consortium. The grant was one of just 56 awarded nationwide.

Operating nationwide since its inception in 1990, RED CAPITAL GROUP, LLC is recognized for its industry expertise, innovative and comprehensive structures, and consistently high lender rankings, including having closed more FHA Multifamily & Healthcare loans during HUD FY-2010 than any other lender and remaining active as a top Fannie Mae DUS® lender for both multifamily and seniors. Red Mortgage Capital, LLC’s nationwide agency platform includes Fannie Mae DUS, Freddie Mac Seller/Servicer for Seniors, and FHA MAP and FHA LEAN lending for multifamily, seniors housing and health care properties.

RED CAPITAL GROUP, LLC is committed to being the nation’s premier provider of capital across the spectrum of asset classes.

RED CAPITAL GROUP, through three operating companies, provides integrated debt and equity capital to the multifamily, student and seniors housing, and health care industries. Red Mortgage Capital, LLC is: a leading Fannie Mae DUS® lender for both Multifamily and Seniors Housing; the nation's most active FHA Multifamily/Seniors lender (MAP- and LEAN-Approved); a national Freddie Mac Seniors Housing Seller/Servicer; an active financier of Critical Access, community and rural hospitals; and services more than $14 billion of income property mortgage loans. Red Capital Markets, LLC (MEMBER FINRA/SIPC) is: a leader in the trading and distribution of Fannie Mae and GNMA Project MBS; an active underwriter of developer-driven multifamily housing bonds; and also is remarketing agent for $1.5 billion in variable rate demand tax-exempt and taxable housing and health care bonds. Red Capital Partners, LLC delivers proprietary debt and equity to the multifamily and health care industries and provides asset management services for RED’s proprietary debt and equity investments.

RED CAPITAL GROUP is headquartered in Columbus, Ohio, employs more than 200 and maintains nine offices nationwide. Since 1990, the bankers of RED CAPITAL GROUP have provided over $52 billion in taxable and tax-exempt first mortgage debt, mezzanine level capital and equity to multifamily, seniors housing, health care, and other real estate properties nationwide. RED CAPITAL GROUP is a subsidiary of ORIX USA Corporation.
About Our Parent ORIX USA Corporation

ORIX USA Corporation ( is the U.S. subsidiary of ORIX Corporation, a publicly-owned Tokyo-based international financial services company established in 1964. ORIX Corporation is listed on the Tokyo (8591) and New York (NYSE:IX) stock exchanges. ORIX USA Corporation is a diversified corporate lender, finance company, and advisory service provider with more than $6 billion in assets and an extensive portfolio of credit products and advisory services. ORIX USA is headquartered in Dallas, Texas and has approximately 1,400 employees worldwide.

Red Mortgage Capital, LLC is a licensed FHA MAP and FHA LEAN lender.
DUS® is a registered trademark of Fannie Mae.


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