1) Total Leverage Ratio (TLR) = 55% 2) Permitted TLR = 60% 3) The reduction in the Distribution will save $120 million pa and reduce the TLR by 2.0% pa. (Therefore 1.0% per $60 million)
Assuming an accross the board fall in asset prices by 15% since 30 June 2008 the 55% TLR would blow out to 65% breaching lending covenants.
They would need to bring the TLR down by 10%!
However,
Post 30 June 2008 the fund has sold the following:
a) Properties totalling $100 million in the September Quarter 2008 plus; b) Richards Distribution Centre $12.5 million. c) Euston Business Centre and Wingfield Distribution Centres for $20.6 million. d) Lidcombe Distribution Centre for a $14.3 million share. e) Canadian Retail properties for &82 million.
A total of $230 million approx.
Add two quarters of saved distributions of $60 million and the total capital comes to $290 million.
$290 milion / $60 million = 4.8% reduction in the TLR.
The 35% of the Europeon portfolio that's "under negotiation" is probably now worth %168 million.
The remaining Canadian retail portfolio under negotiation maybe $80 million.
That would bring us to a reduction in the TLR of 9.0%. (so close)
Did I miss any sales to help me make up the remaining 1.0%?
IIF Price at posting:
9.9¢ Sentiment: LT Buy Disclosure: Held
