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abrdn Emerging Markets Equity Income Fund Inc T.AEF


Primary Symbol: AEF

abrdn Emerging Markets Equity Income Fund, Inc. (the Fund) is a non-diversified closed-end, management investment company. The Fund's investment objective is to seek to provide both current income and long-term capital appreciation. The Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in emerging markets equity securities. The Fund invests in a range of sectors, including information technology, financials, consumer discretionary, materials, industrials, communication services, energy, consumer staples, utilities, real estate, health care, private equity, and short-term investment. The Fund's investment adviser is abrdn Investments Limited. abrdn Investments Limited is an indirect, wholly owned subsidiary of abrdn plc.


NYSEAM:AEF - Post by User

Post by gharrison1on Mar 09, 2018 10:35am
85 Views
Post# 27690800

debt-to-leverage

debt-to-leverageSomething doesn't quite add up

They say 2017 debt-to-EBITDA will be around 5.15x (a) not including the transaction

On Q3/17 financials, total debt including aircraft loans was $55.6 + $793.8 + $15.4 (finance fees) = $864.8mm (b)

Excluding aircraft loans of $632.6mm is $232.2mm (c)

In Q3/17 YTD EBITDA is $88mm (acquisition closed jan 3, 2017) -- if we annualize this for simplicity sake is $117mm (d)

5.15*117mm (a*d) is $603mm... this implied debt figure doesn't match b or c. My guess is aircraft loans are tied to the underlying assets and non recourse so can be excluded.

if we take $232.2 / 5.15 => we get EBITDA of $45.1mm (implying 2017 figure)

Q2 debt excluding aircraft loans was $117.2MM, so between Q2 and Q3, this debt figure grew $115MM. Assuming they added another $100MM in debt between Q3 and Q4, total debt would rise to $332MM (e)

332 / 5.15 = $64mm implying 2017 EBITDA was $64mm

Either case, this implies Q4 EBITDA was potentially quite negative...

It doesn't make much sense to me, financial are pretty opaque so I could be wrong. Would be great if someone can correct my analysis if wrong.

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