Baltimore-based Municipal Mortgage & Equity LLC has raised $87.7 million through a public stock offering and expects to use the money to expand its asset base and help finance thousands of new apartment units nationwide.
The offering of 3.8 million shares was the company's third and could ultimately raise slightly more than $100 million if underwriters of the deal exercise their options on an additional 570,000 shares. The price for the shares was set at $23.07, the price of the company's stock at the close of markets yesterday.
The equity will contribute to MuniMae's rapid growth since its purchase of Clearwater, Fla.-based Midland Cos. in 1999.
MuniMae originates, services and manages investments in multifamily housing debt and equity debt for its own accounts and for institutional investors. For its proprietary accounts, the company primarily holds tax-free multifamily housing bonds and has about $2.5 billion of assets under management.
"One of the reasons we're very pleased to raise this capital is because we have been and continue to be very conservatively leveraged, and so we like to have a dollar of equity for roughly every dollar of debt," said Mark K. Joseph, MuniMae's chairman and chief executive officer.
The company financed almost 10,000 housing units and increased its assets by 26 percent in 2000, giving investors in the company a return of about 30 percent.
"One of our goals is obviously to grow our assets under management because the broader our scale, the more secure we think the company will be," Joseph said.
Joseph said the company should be somewhat insulated from the recent slowdown in the economy.
MuniMae recently announced its 16th straight quarter with an increased dividend and has posted an average return of 17 percent since it went public in 1996. The latest offering is expected to close Feb. 6.