value for money or deadduck, page-7

watford

thanks for sharing your views - debate is healthy.

Q How can they be in a squeeze when they pay such a good dividend?
A The div may be cut. Since they have a passive asset portfolio, they can generate $36m of distributable income per quarter, but not $275m to refinance this AND pay their div.

My view: they have no chance of a refi! What makes you think they can get $275m of senior debt? Debt deals over property developers are not happening mate, even larger and more diversified players are being smashed (MGR, SGP) I think mgt will be lothe to issue scrip at such a big discount to NTA. It is basically saying that the headstock is expensive ...

Your scenario of the step up and cashout in '10 is reasonable, but I bring the following things to your attention:
1) Look how other perpetuals trade. MXUPA a good start.
2) Pref will probably drop when it goes perpetual; market hates the uncertaintly of no fixed repayment date.
3) Despite your beliefs, ALZ credit is regarded as relatively weak.

So I would really compare this with others. Right now, I think DXRPA and TTXPA have much lower risk, they are asl o100% tax deferred. Look at FCLPA if you want a higher risk security. I consider AAZPB high risk.

You are right on TIMPB. Have you got this trade on? Delta-hedging the TIM would seem time intensive given its volatility, but I agree it is interesting.