re: Ann: 2009 Unitholder Briefing Chairman an...
Absolutely, the ideal scenario would be if we could continue to use cashflow to pay down debt without having to sell assets.
When they say "smaller sales", exactly how much are talking??? Can we reasonably assume that there may be some Mervyns sites included in those "smaller sales"?
***Extract from Pg 5 of the Chairman & CEO's Address:
Debt maturities "In September 2008 we successfully refinanced US$316 million of debt and last week we announced the successful completion of the extension to our US$109 million CMBS loan to June 2011". "I want to make a point that this is a significant achievement, as the extension provides the Trust time to re-tenant the assets while also seeking to either refinance or sell to realise the equity in the assets. Although progress has been made, we continue to have a significant portion of debt which will need to be addressed through both asset sales and negotiations with lenders during the first half of 2010". "However, we continue to have our strongest assets secured by our longest debt".
The way LP has worded the above suggests to me that the debt facilities we have maturing in 2010 are secured by our 'not so strong' assets, and it's these secured assets that they're most likely to sell. It's also positive to see that they are still looking to "re-tenant the assets while also seeking to either refinance or sell to realise the equity in the assets".
My predicition for this year is that we will see earnings of between 4.5cpu - 6.5cpu. I don't expect it to be below 5cpu, but I'm hoping it will be above 6cpu & I believe this is easily acheivable if management can continue to increase the leased rate.
I think the prospect for growth in the US retail sector is quite good. The US retail sales figures will be released Friday morning (US time).
*Retail Sales - M/M change (Prior - 1.4 %) (Consensus - 0.9 %) (Consensus range - 0.5 % to 1.2 %) *Retail Sales less autos - M/M change (Prior - 0.2 %) (Consensus - 0.5 %) (Consensus range - 0.1 % to 1.0 %).
The 'retail sales' figures will be a good indicator of where the sector is going in the short term. If employment continues to increase & retail sales improve, we will start to see a lot more space being leased.
I guess it's a case now of sitting back for the next few months & await announcements on assets sales, debt refinancing, new leases being signed & hopefully some news on the Mervyns' sites.
I expect the SP will recover as US unemployment drops & retail sales improve. We'll have ebs & flows from day-trader activity. I don't expect any significant increases in the SP until we start to see write-ups in asset values.
Cheers.
MDT Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
