The leverage issue is interesting. 4 out of the 7 loans in the...

The leverage issue is interesting. 4 out of the 7 loans in the portfolio are CMBS facilities that have no loan covenants. You would not pay down any principal on these loans which are not revolving facilities. The other 3 loans with CBA are covenant tested and post capital raising the LVR on these is expected to fall below 60% 12 months out from when the first refinancing is due.

On the NTA issue - should you value the stock on the income it pays? RCU will pay distributions only from operating cashflow. Or do you use an NTA measure as determined by property valuations and international accounting standards that assume you sell everything now and repatriate the capital from the US to Australia ie mark to market. This is an unrealistic assumption. Should assets be sold in the US the capital can be redeployed or used to retire debt - all US domiciled. The exchange rate issue is only relevant to income (when you lift the covers and look at the hard issues). The Trust has an exchange rate cap of 0.725 in place until September 2010. This is looking good against 0.90 +

The recent capital raising allows RCU to spend capital on capital itmes and continue to ditribute operating cash. One would think this is a reasonable use of a balance sheet.

Look at the quality of the buildings and the tenancy as well as the 97% occupancy rate.

Please note that I participated both in the recent placement and UPP.