The maximum conversion would be 205 URFs, worth $55.35 (at 27...

The maximum conversion would be 205 URFs, worth $55.35 (at 27 cents a URF share). So buying the CPUs at circa $60 implies people will take a haircut upon conversion. One needs to factor that in when contemplating the circa 10% dividend yield on the CPUs.

URF doesn't have the cash to pay out the CPUs: simple as that. They won't either, unless they continue selling more houses. The CEOs communicated that they won't be selling any more houses, after the bridge loan is paid, which implies they won't generate the cash internally. Even with all of the cost cutting and debt reduction, URF is not yet FFO positive, and I don't think they will be, even after the bridge loan is paid off. The houses they own have to low a yield. What bank is going to lend them any more money to pay out the CPUs?

Unless NJ/NY rents pick up in a really big way over the next 12-18 months, I can't see URF doing anything but convert the CPUs to equity. They'll have a viable, FFO positive business then (or nearly so).

Interestingly, URFPA got hammered today. I wonder why? A big holder wanting to get out?