In the downside scenario, it will not be the ICR covenants that...

In the downside scenario, it will not be the ICR covenants that will get CLW in trouble.

It will be the 50% LVR covenants on $2bn of their debt - currently they are at a ~40% LVR on that debt. This would play out over ~18 months as the market slowly prices in higher cap rates and lower valuations, then gets nervous about debt covenants being breached, then having to do a cap raise at the same time as every other REIT. Even in the GFC, most of the REITS didn't breach covenants but raised to protect against it.

I do not know the future either, however as an investor it is your job to 1. understand the possible scenarios 2. to try and predict the likelihood of that scenario happening and then 3. what effect that scenario would have on the value of your investment.

High yields effect the pricing of every security and it's very hard to hide. Extremely cash generative businesses on low PE's and special situations are the only place I've been able to find good value recently.

Don't be convinced by the investment guru's who preach buying quality compounders with pricing power, these are at as much risk as REITS.