I agree that the implied valuation on the Healthscope operated...

I agree that the implied valuation on the Healthscope operated properties based on the current share price does not seem rationale. I suspect the fear is that a small to moderate reduction in Healthscope operated property valuations will trigger a covenant breach and a subsequent capital raising, which will be painful at these depressed prices.

HCW’s situation is highly unusual, with few comparable case studies to reference. Unlike other REITs, its trajectory is particularly difficult to forecast. That said, I initiated a position this morning. In a realistic worst-case scenario, I anticipate a capital raising may be necessary, something my current position would enable me to take part in. In a realistic good-case scenario, all of the Healthscope operated properties will continue operations at an average of 85% of the 100% rent that was waived for two years.