TSX:NWH.DB.G - Post by User
Comment by
Sadie222on May 21, 2020 10:31pm
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Post# 31059207
RE:RE:Working Capital-Q1
RE:RE:Working Capital-Q1Capharnaum wrote: DanielDarden123 wrote: The REIT’s current liabilities totaled $474.0 million, exceeding current assets of $133.1 million, resulting in a working capital deficiency of $340.8 million as at March 31, 2020.
Current liabilities include:
• Vital Trust term debt with an outstanding balance of $78.3 million at a weighted average rate of 3.81%, maturing March 31, 2021. The REIT currently expects these term debt facilities will be refinanced on or before maturity.
•Canadiandollardenominatednon-revolvingunsecuredfacilitywithabalanceof$54.0million,maturing January 2021. The REIT currently expects to either repay or refinance the facility on or before its maturity.
• $154.9 million of Canadian mortgage maturities. Subsequent to the period, the REIT completed refinancing on $115.4 million of the maturing Canadian mortgages. The REIT expects to refinance the remainder in normal course as they mature. (From M,D&A, Pg.59)
My take: With $360M to be dealt with in the next year, it will be interesting to watch the progress. In normal times this would not be a concern, but suddenly debt covenants are in the forefront and will cause problems for many companies.
Working capital doesn't usually include long term debt maturities.
As to the long term debt, it doesn't seem to be much of an issue. On May 14, they added $82M to their credit facility at prime plus 1.75%. In Canada, mortgage refinancing hasn't been a trouble for anyone with plenty of liquidities available in the market.
They also announced a sale for 70% of their interests related to its wholly-owned Australian REIT for $64M.
Considering their relatively low leverage (44.6%) and the limited effect on their EBITDA of COVID-19, I don't foresee any debt issue for NWH in the short/med term. Also, they may lower the yearly debt charge through favorable renewal interest rates on their 2020-2021 maturities.