RAT have announced today that they intend to write down their properties by about 7% overall.
For the properties acquired 2-4 years ago, back to square one, cap gains since then were illusory.
This puts RAT in breach of some of its covenants.
But its not really news, is it ? A 7% devaluation has been on the cards for a long time, the market been telling all the property stocks that news.
There was no disclosure about unexpected vacancies or substantial shortfalls in tenant rent collections.
So is this fatal ?
Is there any particular significance to them announcing today rather than any other day ?
Are the securityholders whose convenants have been breached going to act ? Would they be better off by doing so ?
Any thoughts on this ?
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