what's next for mdt?

Personally, I think it's almost back to the good old days (in part) where REITs used to release the occasional announcment... I think the major difference now is instead of announcing that we have acquired another asset, we are more likely to get the occasional announcement re asset sales & debt refinancing!

October 2009:

The DDR redemption was completed. This resulted in DDR relinquishing its 15-17% interest in the US LLC JV in exchange for 3 MDT properties & a cash payment of US$1.6m


November 2009:

Management was able extend the maturity date of the US$111.1 (MDT share US$95m) CMBS debt facility (Bison) due 1 December 2009. It has been extended until June 2011. Currently there's an approx LVR of 60%, an ICR of 2.5x & the facility is secured by 13 properties ***It was worth the couple of short extensions in order to get the additional 12 months to extend it until 2011. Good job management!!!


December 2009:

It has already been stated as a part of the Strategic Review that MDT will not pay distributions & that these funds will be used to reduce debt. I expect that we'll see an announcment reitering this, as in the past MDT has paid half-yearly distributions.


February 2010:

Half Yearly Results - I can't wait for this!!!


March 2010:

The unsecured Head Trust loan and liabilities US$86.6m (MDT share US$50m) matures in March. Now I must admit I'm not intimately familiar with this loan facility. However, I believe it's not a non-recourse facility and if "default" is called by the lender, it will adversely impact NTA (currently 40c per unit). I'm sure management are working their backsides off on refinancing or extending this particular facility & I'm supremely confident that this will be done prior to maturity!

June 2010:

The Revolver property facility US$268 (MDT share US$229.0m) matures in June. As at June 2009 we were in LVR covenant breach of the deritative contracts. Provided that we don't see a significant decline in NOI & asset values, I'm confident that this facility will be extended.

There's approx US$170m of US and/or Australian bank loans that are also due. I don't know much about this facility, but maybe somebody else here might know...???

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In the meantime I would like to see an update on the sale or releasing of the ex-Mervyn's sites. There's 32 properties with a leased rate of 6.2% as at 30 June 2009. I would love to see these properties either re-leased or sold before June 2010.

There hasn't been much news lately on any further asset sales. However, I think it highly likely that further asset sales will be required in order to reduce gearing to a level where all debt facilities (with short maturity dates) can be renegotiated & extended.

In the 12 months ending June 2010 we hopefully will see:

a.) Increase in leased rate.
b.) Reduced cost of debt - currently 6.4%
c.) Asset sales (hopefully above, but at least at BV) to reduce gearing.
d.) Strengthing of the US$ (at this stage that looks unlikely).
e.) Core ernings per unit of +6c
f.) And if all my wishes comes true... I'd love to see write-ups in asset values (is that too much to ask?)

I welcome you all to express your views (whatever they may be) on what you think is in store for MDT over the next 6-7 months.

Cheers.