Shortly before the Christmas holiday the beleaguered provider of debt and equity real estate financing agreed to sell its agency product line to Oak Grove Commercial Mortgage LLC, a newly formed subsidiary of Mud Duck Equities LLC.
A two-part transaction, Oak Grove floated a $10 million bridge loan to MuniMae. In return, MuniMae is receiving $23.5 million in cash and in the form of a loan write-off. MuniMae is also receiving two series of dividend paying preferred interests in Oak Grove at a combined principal amount of $47 million. MuniMae did not return a call to GlobeSt.com in time for publication.
While some lenders managed to remain relatively stable until hitting the brick wall that was Q3 2008, MuniMae has been feeling the impact of the credit crunch for much longer. Delisted by the New York Stock Exchange early this year, in June it announced it is evaluating strategic alternatives. In addition to this agreement to sell the agency business, the company is in discussions with potential buyers for other business units, it says, although there is no assurance that this process will result in any transactions.
In Q3, the company's loan production included approximately $120 million in agency originations, compared to $152 million, in the prior-year period. Despite MuniMae's production decline, agency loan operations in general among DUS lenders remain relatively solid.
Although under government conservatorship now, Fannie Mae and Freddie Mac are still actively supporting multifamily transactions. Indeed this is the one asset category that is still relatively liquid, thanks to agency finance. Bethesda, MD-based Green Park Financial, to name one example, expects to close between $1.4 billion to $1.5 billion in Fannie Mae loans for 2008.
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