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Neuberger Berman Real Estate Se Message Board

  • stjdavis7 stjdavis7 Oct 8, 2008 11:58 AM Flag

    How much more does the REIT have to fall

    Before NRO gets wiped out? Its my understanding that they are heavily leveraged and will starting having to liquidate positions soon. Will it go completely to zero?

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    • I just did some math. At .15 a share, withholding the divvie would only amount to a little over 10 million dollars.

      NRO would have to withhold the divvie about 6 months to even get back to 50% leveraged if prices remained static.

      Legally, I am not sure that is even an option.

      Just late night musings.

    • Then grandma will complain she has nothing to spend. This is fixed income fund! remember? Let's kill "the cow" for milk.

    • I agree that money needs to be conserved to pay down debt.....the measly .153 / month is joke when the stock falls a $1 / month.

      I agree...hold your .15 cents so you dont have to liuqidate at depressed levels.

    • If I was a fund manager I would be stalling and praying for a market rally.

      I would also plan on suspending the Divvy and using those funds to pay off debt. I would not want to sell assets now.

      I would wait for the end of the year to sell assets if I needed cash to cover the Dividend payout of 90% if it hadn't already been met.

    • The problem is that NRO has not luqidated to my knowledge.....we know they are at about 42% equity as of tonight. They claimed they would issue a press release if they had to liquidate the fund, but I have not see this.

      With 823m total (473 of leverage and 350m of assets), another drop of 15% in REIT's is a major hit to NRO.

      Does anyone know if they have started to liquidate? If they actually maintain exactly 50% at all times, you might be right that there will always be "some" value; however, if we went from 50+% to 42% in a few days, the big question is ----have they sold anything?

      Them impression I got was that since they re-financed some of the ARP's, they could get some waiver and delay the liquidation process...but this sword can cut both ways.

      Intelligent thoughts /comments appreciated.

    • No. NRO keep selling to keep leverage at 50%.

      Another LEH disaster.

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