Post by
incomedreamer11 on Jun 05, 2023 9:06am
TD comments
TD still see risk for dividend cut ,AFFO above 100% in 2023 and 2024
Event
We are resuming coverage following PROREIT's issuance of $35mm 8.00% Convertible Unsecured Debentures, maturing June 30, 2028 and at a conversion price of $7.00.
Impact: NEUTRAL
Our take: PROREIT's convertible issuance provides immediate liquidity and financial flexibility as it awaits progress on some planned dispositions that were announced last quarter ($36mm in conditional sales contracts across office and retail properties). While the initial impact on per-unit results is largely unchanged (since the credit facility's variable rate is close to 7% today), our 2024 estimates are impacted because the convert replaces existing lower-cost mortgage debt in our model. Although PROREIT has locked-in this relatively high coupon for five years, we note that this represents only 7% of the REIT's total debt.
Use of proceeds: PROREIT intends to use net proceeds of ~$33.7mm towards paying down its $60mm credit facility, which was ~75% drawn at Q1/23. Pro forma liquidity increases to ~$59mm from ~$25mm at Q1/23.
Details: The debentures come due on June 30, 2028, and will pay an annual rate of 8.00% payable semi-annually, commencing December 31, 2023. The $7.00/unit conversion price is in-line with our NAV/unit estimate but below PROREIT's IFRS NAV/unit of $8.17.
Forecast: Our 2023 FFO/unit and AFFO/unit estimates are largely unchanged while our 2024 estimates declined 4%/3%. Our revised AFFO estimates now include a net $0.03/unit (previously $0.04/unit) non-cash cost for PROREIT's LTIP expense. Backing this out would result in a 2024E AFFO payout ratio of 102% vs. 110% currently.
Comment by
canadian on Jun 05, 2023 9:24am
yes please continue giving false information mf short seller. . I want to buy it cheap. I already proved the analyst wrong. He used one time expense of 2.6 million dollars for CEO leaving in first quarter to calculate his AFFO. Dumb analysts, they dont even read the earnings report. Thank you dumb and kind short seller.
Comment by
canadian on Jun 05, 2023 9:30am
I meant 2.3 million General and administrative expenses for the three month period ended March 31, 2023 were $3,518, an increase of $2,316 over the same period in 2022. The increase is primarily due to the one-time retirement fee of approximately $1,600 plus other one-time costs associated with the CEO succession of approximately $600
Comment by
ShaquilOatmeal on Jun 13, 2023 8:22pm
Dont know where the analyst got his numbers. Payout ratio is in the high 80s as per latest quarterly report.
Comment by
ScroogeMcDuck1 on Jun 14, 2023 12:13am
Yeah and the payout ratio actually improved last earnings. The internet is full of scam artists and misinformation