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RAIT Financial Trust Message Board

  • sander0975 sander0975 Oct 25, 2010 5:56 AM Flag

    recourse-debt 2012 is the problem

    I checked the motivation of the FBR-capital sell-advice on may 13th this year where they rated RAS at underperform/$1,50 because of:

    -earnings capbility too weak
    -mature debt in 2012.

    HOW MUCH IS and HOW CAN THEY MANAGE this amount of repy this debt in 2012?

    Thank for your respond.

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    • they've done a number of things to address the convertibles so far. they've sold all their non-performing assets at steep losses to get it to the point where it reached early this year.

      after early this year (and late last year), they have no access to refinancing (so far) and have diluted the stock around 50% (65 to 100 or so).

      the convertibles are now around $150m. RAIT has to address around $20m a quarter if they want to address all of the convertibles by April 2012 when they're convertible.

      to address $20m a quarter they either need access to refinancing (which they've said in the CC they don't have atm), dilute more (almost a 100% probability imho), or sell low fmv assets (with debt associated). not a pretty picture atm for stockholders...

      after the 3Q results, imho, RAIT is a wait and see...and long term appears that RAIT hasn't quite turned around yet...

      • 1 Reply to niice2meetu
      • OK!

        Thank you for the story so far. This is making it much more clear for me.

        150 millioen /8 quarters is about 18,75 a qarter indeed. Cash-outflow i assume?

        This 18,75 quarter cash-outflow has to been compenstated by operating cash-inflow/selling (non-performing) assets. Am i right? Otherwise they report losses (finally).

        And they are using the healthy assets to partly support the requirement payments of the convertibles for 2012, seperately from the np-asset which they selling.

        So, they sell non-performing assets to partly meet to the require patments of the convertibles 2012 and how more?

        Where gets the company his revenue from?
        How much is this?
        And can they be enough to pay the debt 2012 instead of selling np-assets again and again (it is also al loss if they sell np-assets under book value).

        Apologize from my English ; I am Dutchman, nog good in this language.

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