DRI Healthcare Trust T.DHT.UN

New Financing

[mjh9413]

 Am I understanding this??!
From NR:
"...will not be redeemable by the Trust prior to December 27, 2027, except in the event of a change of control of the Trust, in which case the Preferred Securities will be subject to a mandatory redemption.

The interest rate on the Series A Preferred Securities will increase to 10% per annum if any of the Series A Preferred Securities are outstanding on January 1, 2028..."
So, they have to pay  $6,6MM cash interest each year til 2027 and if any prefs remaining after effectively 12/31/2027 they increase int rate to 10% and ,of course, it might all be outstanding on that date given that is when repayment can first be made. To avoid outstanding they need to accrue $95MM by that date (making it unnvestaable money) or else get new financing. In addition to all this negative, my biggest beef about this deal is that we know the money is not deployed immediately so it is all cost and no income (for how long?) on every dollar not deployed.
I must havee it wrong.

[theanalyst11]

fax capital is smart money. they might take a bigger stake down the road.

[HermannHaller]

I think you should look at it like a 5-yr bond issue. The idea is that it would be refinanced, as most companies (that plan to continue in operation) continue to refinance and repay debt on an ongoing basis. Unless of course the company is acquired. Remember that there is plenty of insider ownership, they had no obligation to do this, they must see it as a positive move. Clearly they believe the

[deleuze68]

1) Only the $19.76 million of Series B preferreds have a 2027 redemption date. 2) I woud expect the money raised from the preferreds can be used to pay down part of the credit facility. This would essentially be a wash as the credit facility currently has similar interest rates

[mjh9413]

That is not how I read it, viz.," The Series A Preferred Securities can be redeemed at par, at the option of DRI, at any time from and after December 27, 2027. The Preferred Securities... (A&B...)will not be redeemable by the Trust prior to December 27, 2027" No matter I sold remainder of my holding today having got rid of most after the lack of a special dividend IN CASH