Mon, Sep 1, 2014, 11:37 PM EDT - U.S. Markets closed for Labor Day

Recent

% | $
Quotes you view appear here for quick access.

Senior Housing Properties (SNH) Message Board

you are viewing a single comment's thread.

view the rest of the posts
  • infinitidrivr infinitidrivr Jan 23, 2013 11:35 AM Flag

    secondary--8m shares

    SNH, an affiliate of the RMR group, usually issues shares to build its financial strength, which is a platform for expansion. This usually precedes additional acquisitions of approx. double the amount of the offering(remainder financied by debt).

    Fritz, what do you think is cooking?

    Sentiment: Buy

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • So they are issuing more equity, and then going to buy back shares financed by increased debt? I would think that at current interest rates it makes a helluva lot more since to growth through added debt and not equity offerings. I'm not considering selling my holdings in SNH, but I just don't understand why they always do this. Anyone care to explain the rationale?

      Sentiment: Hold

      • 1 Reply to graalamat77
      • Having higher percentages of equity capital relative to debt enables a company to have: more financial flexibility and capacity; facilitates the raising and cost of debt capital. The RMR affiliates do this at some point usually to enable expansion or acquisitions using their unsecured lines of credit. It puts them in a powerful negotiating position in acqusitions when they are often the only ones to make acquisitions without any financing contingencies. Whats more, higher equity capital maintains or increases its credit rating, hence the cost of capital, borrowed money is cheaper.

 
SNH
23.33+0.09(+0.39%)Aug 29 4:01 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.
Exelixis, Inc.
NasdaqGSFri, Aug 29, 2014 4:00 PM EDT
Criteo SA
NasdaqGSFri, Aug 29, 2014 4:00 PM EDT