Currently most of the debt which was refinanced
is at about LIBOR + 1%, an additional 1.5% increase
on $150M would be about $2.25M per year, less on the
income statement because some of it is capitalized.
Plus, the properties being sold should reduce debt
outstanding.
Wal-Mart and Lowes are willing to settle
for $5M a piece, they account for about 30% of annual
base rent, doesn't that bode well for the cost of
satisfying other tenants?
A bit of a hit but small
relative to the hit the stock has taken, what am I
missing?
None are so deaf as those who will not hear.
YOur guess is as goood as mine in this one an the
timing of a deal, but here is another high yielder,
though not a preferred. If you want to see undervalued
high dividend paying shares, look at ARLP. It's a coal
master limited partnership that pays a big dividend and
will likely raise it to $2.10 a share by the end of
next year. Remember, these type of investments have
K1s and pass through losses to partners so they
generally pay more in dividends than they "earn" on a
taxable basis. That means part of the dividend is retrun
of capital. Best of Luck.
Seems like the preferreds are in a more vunerable
position than I ever thought. You'd think that in order to
attract buyers that they would require that they be more
readily redeemed upon a merger or other out of the
ordinary type event, etc. I love this preferred and feel
really secure and good about it but guess that what you
are saying is that (interest rate issues aside) they
(preferreds) or it should always trade for slightly less than
their redemption value because of the types of risks
they are subject to as in the case of WDN? In the case
of JDN the preferred will probably be fairly valued
considering this type of risk when it reaches the $23 range.
JDN would most likely not be a private buyout,
but bought by a KIMCO type or another public company
that have a similar business model.Despite problems,
JDN mgrs (that still own a lot of stock and cpntrol
the board) were and are very financially conservative
folks.. Unlike WDN, JDN insiders have not used company
money to buy the stock when depressed.Finally the WDN
preferreds were given a good deal -I bought a bunch when the
preferred collapsed.
The only rights that a preferred holder has is a
dividend preference to the common holder or any security
of lower preference and in the case of liquidation,
that if there is enough money, you get par value
(usually 25 on a REIT preferred)before the common holder
gets a dime. You have no vote on change of control
usually. There may be some restrictons on the company with
regard to placing more preferred with senior dividend
rights to an outstanding issue. In the case of WDN, even
after the lawsuit, preferred holders opted to take less
than par since they knew their position was weak. PS.
after the deal was originally announced, I bought
preferred figuring that 25 in five years on a stock trading
at 17.5 (which is where it was trading at the time,
while collecting at $2.38 dividend (I think this is the
amount)was a good risk. The market told me otherwise selling
it down to 15 quickly, only to recover after the
settlement of the class action. By the way, if a buyer does
appear, there is already a precedent for not paying par
value for the preferred stock on a REIT. Still, 18 is
relatively safe, but not likely to have as safe an upside as
the common. The die is cast for this stock to
disappear. Buffett has positions in a number of other REITS
as well. He or another financial investor will marry
this portfolio of good properties with a strong
management team soon!
So it was after a lawsuit that the preferreds
took a hair cut by way of settlement? While I
understand that in a sale they may have to tag along what
you are saying is they fought the sale and as a
result of litigation took less than face value as
opposed to being taken along. Do the preferreds have no
rights to reject a sale or minimum capital requirements
behind them, etc?
Safety of preferred dividends should not bet the
real question here. It is the safety of principal.
Look at Walden Residential, symbol was WDN. It may not
come up now because they were bought out, but you can
check in Edgar. The problem was that while the common
shareholders got $23.12 a share, the preferred holders of
which there were two series, got less than face value,
and then only after a lawsuit which gave them a
$22/share payoff on $25 dollar preferred. Otherwise they
would have been left with a preferred on a very
leveraged company or a nonpublically traded stock which
would have paid off in 5 years. So common is actually a
more certain bet in all but a liquidation. If these
guys sell, I'll bet the number is 15-19 a share, no
higher, but not a bad return in 12-18 months. That's my
prediction.
he has nothing to say and takes a long time to say it.
Was trying to help erichplace answer his
interesting question....his question had nothing to do with
safety. Wasn't trying to find the answer to the kind of
questions you are trying to answer. By the way with a tape
measure I probably could tell you how long the string
is.....
Good luck to you also.
To ask the question, "how safe is JDN pfd?" Is
similar to asking the question, "How long is a piece of
string?" Unaswerable.
In JDN's current condition,
no one can answer your question.
Questions of
safety depend on information and transparency, neither
of which is available now.
To try to invest
in these muddied waters is in fact to
speculate.
No charge, good luck!