TSX:MRT.DB.A - Post by User
Comment by
flamingogoldon Nov 17, 2021 6:41pm
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Post# 34138514
RE:RE:new debs, finally
RE:RE:new debs, finallyI believe they have the room to up the divy now to 3¢ ($0.36/yr) or 4¢ ($0.48/yr) so both your targets of $8 or $10.70 respectively are doable. And, in each case MRC can convert the debentures into trust units and come out ahead along with shareholders buying today.
Mrguillaume wrote: My quick take on the re-finance:
I was disappointed to see a higher yield on the new debentures but given the negative street sentiment in this name the rate of 5.25% is what it is. No change in interest costs - $175M @ 4.5% = $150M @5.25 ($7.875M per year).
The conversion price of $7.80 is a 40% premium to the current price but is 50% below NAV suggests that no major catalysts will show up before 2026.
However with an increase in distribution, the unit price should see upwards of $11 as follows:
Yield of 4.5%:
Annual distribution $0.36 = $8.00
Annual distribution $0.48 = $10.70