As a result, there will likely be news on the refinancings tomorrow.
Given there's nothing official, this is MHO, but I believe that the short, 2-week delay in the refinancings was probably an indication that they will happen and that only the terms are uncertain.
My rationale is simply that if refinance negotiations were at an impasse at the time the forbearance agreements were drawn up (on march 14th) the delay wouldn't have been for just 2 weeks... it either wouldn't have happened at all or it would have been for a considerably longer duration.
2 weeks is a duration suitable to hammer out details, not for making major decisions.
I'm wagering that resolution of the debt-roll will remove uncertainty from CT and has the potential to pop the stock and re-focus investor attention on portfolio repair and growth.
... residual buying from today's conference call but beyond that, my educated guess is that it'll be more of a "show-me" attitude toward CT.
If the downside marks-to-market are over (eg: no more this year), I think that will be a solid positive for the stock. Problem is, stock appreciation based on future "mark-ups" won't be a 2011 event...
... any appreciation due to mark-ups will have to be due to the "anticipation" of them in 2012 or even as late as 2013, IMHO.
... I think it will take longer to recover than my other 2, BDO industry holdings (Blackstone & American Capital) since CT is tied more to commercial real-estate, which will recover more slowly than other forms of BDO capital investment.
Since CT lost 48% interest in it's most viable CDO asset (III) along with the elimination of it's direct recourse debt, it has both lost it's most potential growth vehicle and it's biggest risk factor in one swoop. Still, we need to remember that mark-to-market is a 2-edged sword and the slow improvement in rents and occupancies will allow both a reversal of mark-to-market adjustments and use of tax loss carryforwards as occupancies and rents eventually affect values and new investments that can exploit the yield curve.
Of the 3 BDO's I mentioned, I like ACAS the best but I think CT has more potential upside... albiet with more patience.
So CT is now free of recourse debt, owns 51+% of CT Legacy Reit, keeps CTIMCO, residual interests in CDOs and retains losses (or future tax assets). While CT Legacy Reit is co-managed and co-owned by the old lenders who now have equity stakes and all this has been financed by a new mezzanine with March 2015 maturity at 15% interest.
Is that it? Not great, but not too bad either. If there is a turnaround in fundamentals profits should roll in... But that 15% interest is... ouch.
... since the forbearance agreements announced on 3/14 preceeded the due date on the financings by a day (due 3/15) that something would be announced a day ahead of the expiration of the FB agreements.
Today is due-day.
Light volume... investors holding their breath?