SPDR Portfolio Short Term Treasury ETF T.SST.U

Primary Symbol: SPTS

The investment seeks to provide investment results that correspond generally to the price and yield performance of the Bloomberg Barclays 1-3 Year U. The fund invests at least 80%, of its total assets in the securities comprising the index and in securities that the Adviser determines have economic characteristics that are substantially identical to the economic characteristics of the securities that comprise the index. The index is designed to measure the performance of short term (1-3 years) public obligations of the U.S. Treasury.

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SPDR Portfolio Short Term Treasury ETF > A 0.25 ratio should be fair

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Comment by dlegovichon Mar 13, 2009 12:03pm

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Post# 15842910

RE: RE: A 0.25 ratio should be fair

Well...

As of today's assets, SST will have 3.5 million ozs of production in the medium term (see any SST presentation).
Assuming Silver averages $14 medium term (say up to 2012-2013), operating CF in 2013 would be around $35M.

New SLW (let's call it NSLW) will have 2013E production of some 33M ozs and, with same silver price assumptions, $330M of operating CF.

NSLW operating CF per share (311M shares post deal) would be around 1.06 $/share.
SST alone (123M shares), without being sold to SLW, would stand at 0.285 $/share (US$).

So, in order for SST shareholders to maintain future CF per share, a fair ratio should be 0.285/1.06 ~ 0.27 (sorry, not 0.25 as I stated in the subject).

I didn't take into account dilutive effects from options/warrants.

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