TSX:NWH.DB.G - Post by User
Post by
50centdollarson Jun 26, 2023 12:41pm
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Post# 35514732
Sensitivities and Uncertainties
Sensitivities and UncertaintiesSo I did a deep dive into the last annual report and MD&A, and I did not emerge confident enough to make an investment even at these lower levels. The sensitivity analysis around interest rates given all the floating rate debt does not paint a pretty picture. The JV not going through brings this into sharper relief, given proceeds were to be used to pay off higher yielding debt. It also makes me question how much difficulty they'll have getting a JV partner for the larger US portfolio.
I also wasn't able to find more information on the non-indexed leases. I have to assume annual/periodic step ups are included, but what are they? Are they 2%, with inflation running at 5% or more?
The longer interest rates stay elevated, the more I think cap rates will rise. That may sour the terms of potential JV arrangements.
I see very minimal bankruptcy risk, but do see a possibility they may have to sell some core assets they'd prefer not to sell in order to pay back debt.
At the end of the day, there's just too much uncertainty to take a stake in this for me. Maybe if it gets even cheaper I'll take a flyer on it. If interest rates come down, this REIT may do very well from current levels.