In the recent 10Q is this little note:
"Subsequent Events—Subsequent to quarter end, we repurchased, in open market transactions, $392.1 million of our senior unsecured notes for an approximate gain on early extinguishment of debt of $176.1 million."
No one likes this horrendous market environment, but iStar didn't let much grass grow under the quarter before it snapped up almost $400MM in debt.
I am in agreement with you on everything in your post except for the line in the sand at $1. As long as iStar does not get themselves delisted, why not let the stock drop temporarily below $1. Any shares bought back at say 75 cents would be 33% more effective. You and I both love the potential power of the buyback here, so why not let it be more powerfull.
As to the psychology of the small investor, forget about it. This is not the market nor the time to be buying such stocks based upon price action. I buy based on fundamentals.
I thought I had read here or somewhere that they had some debt marked at 30 or 35, along with some 40 and 60%. One of your statements seemed to indicate that was BS, would you mind reshedding their ratings and their effect on debt as to what the real percentages are? I oould have gotten my info from here and I know you are the trusted expert here as far as I'm concerned on this stuff.
Have a good one - I'm off to get FiretrUCKED UP! NOLA (mardi gras is early this year) still has its moments.
Hope you enjoyed the festivities.
Here's the link to the SFI debt.
As you can see there is a wide range of pricing.
I think they're approaching the debt on two fronts: the first would be getting the biggest discount possible to create safety with the net worth covenant and allow them to dump distressed assets and still come out ahead, and also to manage liquidity by buying shorter maturities even if the discount isn't as large.
Once liquidity is assured the big discount debt works wonders on all fronts, IMO. Every time they buy debt they are decreasing future interest expense, so it's not just a balance sheet move.
My ride is running late. First of all, you've got a MULTIBILLION DOLLAR COMPANY MAKING HUNDREDS OF MILLIONS A QTR WITH 15 BILLION IN UNENCUMBERED ASSETS AND CLOSE TO A BILLION IN CASH.
You've got 133 million shares. Don't you think the buyback for 1/3 of the company is worth 40 million bucks? Especially when you have appropriated 50 million and 44 million left. They are instant collateral for re issuing without any dilution. It takes 40 million shares OFF THE MARKET MAKING SHARES SCARCE.
You can list a million shares at 10k lots, 50k lots, whatever size lot you want and nothing says you can't step in anywhere above a buck to say a buck ten anytime you want to mess with the shorts. It gives the small shareholder a wall for his back. CONFIDENCE SO THAT EVERY SHARE HOLDER KNOWS - WE WILL BUY 1/3 OF OUR COMPANY BACK AT A BUCK BEFORE WE ALLOW ANY SHORTS EVEN THE MERE POSSIBILITY OF DELISTING WHICH IS ONE OF THE ONLY 3 THINGS SHORTS STILL IN ARE COUNTING ON - DELISTING, BK, AND GETTING OUT WITH AS MUCH MONEY AS POSSIBLE.
There's more but that shouod be enough for now.
Have a good one bud,
Has nobody mentioned this yet? I'm surprised that such news is only now being posted.
I've been way to busy to read the Q or the board lately, but have found Quad to tend to be up-to-date and accurate.
That's great news, but I'm a little disappointed that they are still paying 60% of par. I hope those bonds are short maturity.
The longer issues can be bought for less than 45% of par, with the bid being about 35% of par--and that's retail!
As a side note, they must really feel good about their liquidity position into 09 to be extinguishing debt at this rate.
And I'll say it again, I sure hope they are buying the shares at these prices. There is no excuse for any dry powder in the buyback at quarter end.
They are paying 90% of par for notes that are due in about 4 months. That is a good deal.
They are getting a much deeper discount for notes due in a year. On average, they are getting a 40% discount.
They know they need to concentrate on the 2009 maturities.