i am not down ramping nor spruiking but geez this stock has been on a downward trend and it is copping a pounding today. i am actually shocked to see it drop below 8c and am just wondering how low it will go before they end it all..?
thoughts?
agree! I guess I depends on whats driving it. Though looking at the greater reit market MDT seems to be on a downward run on its own so you would have to think its not a market trend. The trigger seems to be have been the announcement of refinancing of the longhorn facility III. I suspect it has to do with the lenders locking up any earnings from the proporties. All distributed cash from these properties must go to paying the debt until the facility is payed down. I suspect the market also believes this will happen to the longhorn facility II Which is a total of 120Mil and secured against 8 assets I believe. This will lead to 11 assets in total having the distrobutions locked into paying down debt until these facilities are paid off which could take a few years.
In response to the hedging mentioned. In some ways we are hedging out earnings into future earnings. Using the assumption the USD will get stronger as as their economy improves. By not paying distrobutions now. This money is being used to pay off debt (which is in USD) by reducing debt you are reducing intrest payments and it means future distrobutions will be higher. When The earnings are paid out at this future date, It will be paid out in AUD and at this point we hope the exchange rate is better.
This is why I happy to not get distrobutions for a least another year.
MDT Price at posting:
8.1¢ Sentiment: LT Buy Disclosure: Held
