price creeping up

Wow what a move today...shame I missed out.
Saw this explanation

By Aireview
20 July 2009 @ 08:00 am AEST
Next Markets Article

Contrasting announcements from two of Macquarie Group's investment satellites, the CountryWide shopping centre trust and the Macquarie Infrastructure Group.

The shopping centre trust will shrink dramatically after it sells about 80% of its US assets at a steep discount; but a day after cutting its valuation by another $2 billion, MIG revealed slightly better than expected traffic figures for the June quarter .

Macquarie CountryWide agreement to sell its 75 per cent stake in 86 properties for $US1.3 billion ($A1.61 billion) saw its security price rise in Friday's mixed market. It ended up a solid 10 cents at 61.5 cents, a jump of 19.4%.

The sale represented a 9.1% capitalisation rate and a 24% discount on the 2005 purchase price.

The sale to a US joint venture will take two years and, when complete, will reduce the trust's portfolio exposure to the sluggish and imploding US retail sector and economy to 25%, compared to a peak of about 70 per cent in 2007.

It should also eliminate $1.38 billion of US commercial mortgage bonds due to be repaid in the next few years and bring in $226 million cash. Gearing will be cut to around 36% from nearly 60 six months ago.

All in all the market seems to be treating news of the sale as a 'lucky escape' by another Macquarie Group fund that had looked on the ropes at one stage.

The sale process will take two years from this month and involve three separate phases.

Money from the first part of the sale will be received this half.

That will give the Trust the confidence that a big refinancing due at the end of the year, can happen without too much strain.

The Trust said it is "progressing various refinancing options for the A$450 million CMBS facility, scheduled to mature in December 2009. The facility is secured by a A$755 million portfolio of 44 Australian assets.

"If required, the Trust anticipates that repayment of the facility will be funded from current surplus cash, proceeds of sales completed and in progress, and the un-drawn capacity of the Head Trust facility. Completion of the first phase of the transaction will further improve the Trust's liquidity position and, if required, will assist in repayment of the CMBS notes.

"Proceeds from the second and third phases of the transaction are expected to be received during calendar year 2010 and will further strengthen the Trust's balance sheet and provide greater flexibility to meet refinancing obligations and capital requirements in the coming years.".

While the sale will "negatively impact" the Trust's earnings and net asset backing, investors reckon its better to have some value and a concentration on Australia and NZ, than to be anchored in the mire than is the Us economy and especially shopping centres where several big chains have gone bust and the second biggest centre operator is broke as well.

The sale was part of a strategy foreshadowed at Macquarie CountryWide's 2008 Unitholder Briefing, aiming to reduce gearing, mitigate near-term refinancing risk, enhance balance sheet strength and refocus the Trust's portfolio towards Australia and New Zealand.