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NorthStar Realty Finance Corp. Message Board

  • dar200 dar200 Jun 19, 2013 4:45 PM Flag

    New notes

    8-K just filed. NRF netted 290.5 million after underwriting discounts and expenses of issue. Thus, they collected 968.333 for each 1,000 issued. Annual interest is 53.75 per 1,000. Therefore, the effective interest rate is 5.55% on cash received......FIXED for at least 10 years and likely for 20 years.

    I was pretty close with my initial guess: "These are 20-yr notes with a fixed coupon of 5.375%. After discounts and offering expenses, I expect the effective interest rate will be about 5.5% to 5.65%."

    Without a disaster, it looks to me like a penny per quarter is in the bag thru 2014.

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    • Dar,
      THROUGH? You mean for the next 6-7 quarters? That's a pretty confident and bold statement. You've been astonishingly accurate on most of your recent predictions and I most certainly hope you are on this one too as that would bring us to $1/share annually. GLL


      Sentiment: Hold

      • 1 Reply to kenpalley2000
      • Well, Ken, Tylis gave us a hint at the Deutsche conference when he said they hoped to increase the dividend while at the same time reduce the payout ratio. This means to me we will not see more than a penny per quarter. Taxable income will not be a problem because they can count the first 3 2015 dividends as carrying out 2014 taxable income. Besides, they will have a ton more depreciation in 2014.

        So, 2012 cad = 74. Calendar year payout = 61.5 or 83%
        2013: 18+19+20+21 = 78 vs 1.01 midpoint = 77.23%
        2014: 22+23+24+25 = 94 vs at least 1.23 = 76.42%

        78 is 26.8% more than 61.5
        94 is 20.5% more than 78

        The market should be happy with a 20% 2014 dividend increase over 2013 which will be a 26.8% increase over 2012.

        So, without some disaster, I think they already have enough to continue a penny per quarter thru 2014. However, I don't think it will be more than that as long as the market is happy and the payout ratio is going down.

        Also, the market now expects (demands) a penny per quarter. IMO, NRF will not change without prior warning. Otherwise the price will tank on a surprise "no increase".

18.25-0.17(-0.92%)Nov 27 1:03 PMEST