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iStar Financial Inc. Message Board

  • avantgardemind avantgardemind Apr 6, 2009 5:21 PM Flag

    Loan discount possibilities for alchemy..

    Wow...look at this loan settlement for a reit outstanding loan. I wonder what the fine details are? NEW YORK (AP) -- Gramercy Capital Corp., a commercial real-estate finance company, said Thursday it paid off a $174.6 million KeyBank loan at a discount.
    Related Quotes
    Symbol Price Change
    GKK 1.39 +0.20
    Chart for GRAMERCY CAP CORP
    {"s" : "gkk","k" : "c10,l10,p20,t10","o" : "","j" : ""}

    The New York-based company said it paid $45 million and agreed to pay an additional $15 million over time.

    Last month, the company satisfied all of its obligations under a $9.5 million master repurchase facility with JPMorgan Chase Bank by paying $1.9 million, it said. JPMorgan agreed to assume full ownership and control of the related loan asset.

    Gramercy said it continues to negotiate amendments to its loan with Wachovia Bank and its master repurchase facility with an affiliate of Goldman, Sachs & C

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    • I read the prospectus and it clearly stated that "no" interest would be paid on dividends in arears.
      You're right and I stand corrected.
      Pluck

    • I agree with most of your post, but not the following:

      >>it is my understanding that preferred shares earn interest on "delayed" dividends.<<

      This is untrue with respect to the vast, vast majority of preferred stocks.

    • No common dividends can be paid without all preferred dividends being paid in full & current. As well, it is my understanding that preferred shares earn interest on "delayed" dividends.
      I like preferred shares because the dividends are a sure bet unless the company goes belly up - where as the common shares have no assurance of payment or IOU's on any dividend reduction or suspension.
      The company has no maximum time obligation to purchase the preferred shares but they must pay the stated interest based on the par value at the initial offering.
      Go to quantumonline.com and type in a preferred symbol and read the particulars of that offering.
      Happy investing
      Pluck

    • >>So a preferred dividend could be declared paying ONLY one quarter even if two or more quarters have been passed?<<

      Correct. If GKK is in arrears $1.00 per share in preferred dividends . . . and its taxable income is only $0.30 per preferred share, there would be nothing to stop them from paying out only that lower, tax-required amount (which in this hypothetical, is less than 1 quarter's standard preferred dividend) and continue to leave whole and partial dividends in arrears.

      There is no interest owing on dividends that are in arrears . . . but they do have to catch them up (or otherwise retire the preferred shares) before paying out a single penny on the common.

      If (big IF?) GKK survives, the GKK-PA will turn out to have been a serious bargain.

    • So a preferred dividend could be declared paying ONLY one quarter even if two or more quarters have been passed? Dividend declared under such a circumstance would have to be for the oldest outstanding?

    • Dont forget to mention that Gramercy (GKK) is still making a profit every quarter even in this economy.