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Sunrise Senior Living Inc. Message Board

  • zoomlik zoomlik Oct 25, 2009 2:01 PM Flag

    ok! after all the little Due Delig. on Germany

    situation I have done, I have come to conclusion that the situation is not nearly as bad ... here is why

    Out of 9 communities

    4 have total debt of $75M (50M euros) and SRZ must pay the lenders the difference between the sale price and the so called "release price" .. we do not know the "release price" for each unit. However, a reasonable guess would be 20% of total debt. Similar to paying down 20% down payment. Since we want to be conservative, we will raise that to 33% or about 1/3. Hence SRZ will be at most stuck with $25M for these 4 units ..

    2- For the remaining 5, SRZ has guaranteed that it will pay for the monthly mortgage (interest and principal). But when the mortgage ends, it does not pay for the remaining principal. Because we do not know the length of the mortgage payments, or the remaining principal, we can not accurately guess the total exposure. But we do know that they have closed only 1 of these 5. So, the cash flow from the other 4 is probably covering the cost of interest and probably portion of the principal. Hence, the exposure to these 5 should be low. To be conservative, we assume the exposure to these 5 communities is as high as the exposure for the other 4 under worst case conditions.

    So, in total, for the 9 communities

    - worst case cash total cash outflow should be about $50M.

    - average case is $25M

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    • Zoomlink:

      You are a little out of place here..

      if you read the SEC filing you can also get the amount of repayment due for the 5 communities till 2012.

      Also the worst case situation amount will be 70 million + repayment of monthly mortgage till 2012.

      That is the worse case scenario, I think its less than 90 million.
      Best case could be around 25-50M as stated

      (These are my views and understanding if you need to know more please read SEC filings for sunrise)

      =happy investing