TSXV:PAR.H - Post by User
Comment by
YieldChaseron Apr 30, 2014 7:58pm
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Post# 22510177
RE:WTF ? 10% interest?
RE:WTF ? 10% interest?
Stock is already down to $4.50.
As stated here earlier, they have no cash, and they are over distributing. As such a distribution cut is likely, but that may not come soon, if (and a big if) they are confident the acquired assets will deliver higher cash-flow, NOI and thus AFFO this time next year, as this $15M loan will buy them one full year of distribution of around $13.5M/year.
They may just hang in there.
A sound strategy woudl be to preserve cash by cutting distribution and not borrow it at 10% and then pay it out.
If they cut distributions by 20% to 40 cents a year and using a 10% distribution goal that would mean $4/share as a reasonable 2014 target, in line with the analysis of M Partners.
It may go lower with the unknows in the acquired assets.
It may actually go higher if they cut distributions by 50% or even 100% to free up cash.
On the upside they will be able to refi several properties at lower rates and that will help cash-flow. They might just squeek by with no distribution cut for another quarter or two. We shall see.