Healthscope assets are around 50% of HCW's assets.Income is...

Healthscope assets are around 50% of HCW's assets.

Income is around 35-40% (but hard to estimate as UHF distribution I assume is an AFTER all UHF overhead and interest costs). NB: FY25 UHF distribution should be closer to $20m under normal rent conditions v's $14.5m in FY24. Comparing non-UHF Property NOI with UHF Distribution in the accounts is comparing apples with oranges.

I just went super conservative to assume 50% of income at risk or a 20% reduction in rent on 50% being 10% across the portfolio.

But I don't believe there will be much if any rent relief. And if there is, my bet is that di Pilla will get the value back in another way.

And despite @UberTrader suggesting the Govt won't bailout Healthscope, that might be the case, but they will in my opinion bailout the healthcare system if required as no politician wants to have major hospital closures on their watch. It's too big and toxic to allow to fail.

If there is a bill that will be paid, it is the rent to the landlord IMO. And HCW has an incredible cross default trump card on the lease structure. That makes a deal much easier to achieve with a rival operator ready to step in.

Momentum investors and those panicking likely see an 8% yield. I see an 8.8% yield. If these broadly represent the FFO yield, then both are a bargain IMO ... and that makes a market.