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Senior Housing Properties (SNH) Message Board

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  • moron_number2 moron_number2 Dec 4, 2005 10:37 AM Flag

    12/1 announcement of common share sales

    I am not sure I understand the reasoning behind this. If the debt is at 7.xx % and the common stock is paying a dividend of 6.xx %, what is the benefit to current shareholders?

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    • IMO, concern for the stockholders had little to do with this secondary. Having cash or reduced debt levels simply gives the company greater flexability in the future. I am OK with the decision so long as there is no potential for a reduction in the dividend and repayment of the debt reduces interest expense while there is some dilution. The real beneficiaries in this secondary are those that did the follow on sale of shares. The got liquidity without driving down their offering price.

 
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