TSX:SOT.DB - Post by User
Comment by
Tree2treeon Aug 10, 2024 8:14am
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Post# 36172635
RE:Status of Debt Covenants
RE:Status of Debt CovenantsTVR, I agree that SOT appears to be in a deep hole with respect to debt covenants. But being on the wrong side of debt covenants does not mean being insolvent. Yes, the debt holders probably have the right to force a fire sale in an effort to get their money out. But the key is, it would not likely be in their interest to do so. The debt holders are better off if SOT remains a going concern and on the road to recovery. Hence, the important phrase in the debt discussion is "The REIT is in active discussions with its lenders to amend, renew or consider alternate arrangements." At some point, there could be a block sale or a merger as you suggested - but it is in the interest of all stakeholders to hold off on such deals until there is further improvement in the market, which is very likely with falling interest rates. JMHO