Temple Hotels TMPHF

Target Debt Levels?

[pone]

In any of their conference calls or public releases, has Morguard ever said what they want the target debt level for Temple Hotels to be?   Based on other Morguard companies, I am assuming they would target about a debt-to-asset ratio of 0.6.   Using the last report I have that means - assuming they do not sell any properties they already hold - that they need to inject about $100M of cash into the company and use that to pay down debt.

This would be an interesting capital raise considering that the total capitalization is currently well under $100M and Morguard doesn't have $100M to contribute if they want to be the backstop.   That implies raising this through an equity offering would require a very steep discount in order to incentivize new money to come in.

[robbie80]

There is no doubt that TPH debt level is high and that's why share price is depressed. Another indicator is Net Operating Income (NOI) vs interest payment. Estimated 2017 NOI is around $44M; interest payment around $24M. TPH has around $20M cash flow towards debt repayment each year, which means TPH would save around $1M interest expense each year. It would take 2 years for TPH to bring NOI