Most flexability hrrm I think that would be asset sales or offering up properties as security for the loans.
I think the issue could arise for selling properties to satisify two boards rather then one. EG DDR may be in a good cash position I have no idea and not have any loan debt coverance issues. If this was they case they would be unlikely to want to sell assets rather hold and sit out the GFC.Where as MDT needs to recapitalise and liquidfy their assets. The directors of DDR have no responsibly to the shareholders of MDT they just will do what ever is best for DDR. This would make some sense as to the redemption. Its also explains why they would sell out their holdings in MDT to stop any conflict of interest if they vetoed a sale that went against MDT they could get a reaming from some shareholders of DDR as the decision on one side of the fence (US JV) could adversely effect their position on the other side of the fence(MDT SHAREHOLDER).
The redemption of these properties therefore was essential to ensuring the survival of MDT. The pro rata debit maturity issue will be good. Assume they tried to give them as many assets with debt maturitys due next year to minimise their debt refinancing problems they will have next year.
I think all in all from what I can tell directors of MDT are doing quite well! Looking at problems before they become critaical. Markets have eased and will ease more next year and if recap goes thou ok the current SP discounts will be removed.
When you look at the likes of AJA trading at 47c the only difference between AJA and MDT really is MDT arn't paying out their earnings rather using them to recaptialize the trust for better times. I prefer this obviously because the sp has been driven down and provided excellent buying opporuntity and when distro return they will be much higher because of this and well all get nicely rich :)
MDT Price at posting:
11.5¢ Sentiment: Buy Disclosure: Held
