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Cohen & Steers Reit and Preferr Message Board

  • codehead321 codehead321 Aug 13, 2008 1:29 PM Flag

    55% of preferred to be redeemed

    This redemption should be positive in that the auction market preferreds were probably earning a high rate due to no auction. Thus, the redemption should reduce the funds expenses. Not sure to what extent.

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      Believe RNP was leveraging our income with low cost auctioned preferreds. RNP has borrowed the funds elsewhere, to redeem these ARCS from sources outside the auction market for preferreds.

      So RNP is still keeping us leveraged with replacement borrowed money that still costs RNP interest expense. Hopefully we will still earn more from RNP's ivestments in REIT's and corporate preferred stock than the interest expenses.

      Believing we are.

      One debt is replaced by another. Hopefully the new lenders will not panic by further bad news in credit markets, where it is not related to RNP. Our position is improved. Especially with the NY Attorney General is going after major Wall Street investment bankers for misrepresenting ARPS as "cash equivalents"

      Cohen & Steers action is being forced by the general lack of confidence in unusual debt instruments. Long term we are best out or the auction market. Anyhow that's my understanding of it.

      I to admit being stung by the market share price, stumble of RNP shares. Is this an unreasonable reduction driven by a false panic??

      I believe Real Estate is safer than the stock market. Only a serious recession threatens rental-lease income. Is this a rare opportunity to invest for a "safer" 12% dividend?? This is better than the long term return on the general stock market.

      Life only offers us five or six truly golden opportunities. Is this one of those oportune moments??

      Opinions ??


      • 1 Reply to Sellstopp
      • I share your views. I believe REITs that are invested in commerical real estate or their mortgages are safe at the moment. If the businesses that are occupying this real estate cannot pay their rents, then the economy is in a shambles. I don't think this will happen. But we will see.

        RNP leveraged because they believed they would be able to boost returns. Hopefully, the asset values they hold has not collapsed enough to hurt them. I don't believe the income has been diminished.

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