I'm concerned that distribution is likely to fall after present hedging lapses (assuming present A$/Euro exchange rate is maintained)
From REU Half Year Results June 2007
> REU has entered into foreign exchange hedges for 100% of its Euro income for the next 6-7 years at an average rate of €0.49 (This is what I want to know - what happens afterwards? See my guess calculation below) > REU’s equity capital exposure has been hedged through a series of cap and floor arrangements as per the table below: 0.6479 0.5301 Nike HQ 0.6351 0.5197 Hermes Plaza 0.6808 0.5530 German Portfolio Cap Floor Assets / Portfolio (pg 17)
Q – What happens after the 6-7 year period? Would the distribution change according to the current exchange rate. Eg assuming present exchange rate of Aus$=€0.5991 is maintained, and hedged distribution would be 10.1c, would distribution after hedging become 10.1c * €0.49c/€0.5991c = 8.26c? (still quite respectable given current at sp of 47.5c)
Anything else we should know about the currency hedging?
REU Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
