I find the hedging rates a bit hard to read. The quoted hedging at 30 June 2022 is still 55.9%. Does this say anything about the length or level of the hedge? If it meant that debt was 55.9% hedged at current rates for the term of the loan then you might conclude that 55.9% of debt is simply at a fixed rate for the term. I presume "hedging" is much more nuanced and could include any arrangement to cap increases - even at a slightly higher rate than now?
Lower for longer interest rates mean we haven't had to worry too much about the measure of hedging. But now I wonder whether we can really tell much at all from the quoted figures?.
Incidentally, I notice Credit Suisse has dropped its target for COF from 2,27 to 1.90 (-16%) according to one report I get. Another source suggests that the FactSet consensus is $2.02. These are probably just consistent with what we are already seeing in the market. Not much you can do with these except that they may also confirm a view that we may be in for an NTA decrease as cap rates increase?
COF Price at posting:
$1.69 Sentiment: Hold Disclosure: Held
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