To keep things round and simple, 10 million shares cancelled at $15 average wil increase debt by ~5% and NAV by $1.5. The thing is cancelling 10 million shares at current pace will take 2 years.
So in 2 years (20k/day) with all else being equal you will have:
- 35% debt/book value
- $23.50 NAV
Of course this is just one scenario because we don't know the average cost of the NCIB and how FFO will be used.
That being said, in 2 years if the economy is not robust or goes into a recession the properties could easily LOOSE $1.50 in NAV and so the NCIB is basically a status quo operation.
My thesis is here is that the NCIB at the big 30% discount over 2 years will not do much.
They have the balance sheet to tender 20% of the float in one shot (like brookfield) at $16 and immediately have a $2.50 jump in NAV. If HOOPP can also increase their holdings signficantly along with a 20% retiring of the float, then, and only then can this hit $20 and they can continue on their strategy of acquiring and perhaps even re-issue shares.
We'll see what happens