Yes margins are down. But, yes WNR is hurting NTI. As a long time NTI holder I sold when the deal was announced, and I don't think I was alone in this.
It is to WNR's benefit if both their shares and NTI's shares fall in value, and not paying a dividend can also be seen to be benefiting WNR.
The CS determines the margins. The PADD 2 cs was down about 17% q4 '15 to q1 '16.
This quarter, with more output, NTI showed a $11 million shortfall in distributable income while last quarter they had $36 million in di: a -$47 million dollar turnaround.
Someone tell me if WNR is hording our distributable cash.
Don't see why earnings will move up unless WMC has magic hedges. The spread shrank significantly Jan to mid March. BV may be up a bit, but I doubt it. April was an improvement over Jan-March; but, it all depends on their hedging strategy.
all opt for cash, everyone gets the prorated deal: .29WNR +$15, which is now worth in the mid $22 range.
Seems like it's too late to sell, maybe unit holders will get another divy.
if every NTI unitholder opts for all cash ($26), then everyone will get $15+.29 WNR stock ...$22.84 today
if every NIT unitholder opts for all stock, then everyone will get $15 + .29 WNR stock......$22.84 today
If 1/2 the NTI unitholders opt for all stock and 1/2 opt for all cash then 1/2 will get $26 and 1/2 will get ...(I never figured that out-didn't want the stock - whaddasuprise)
So why the big move down. Low volume, long short spreads hardly moved and rates fell a bit. At the least BV increased.
Maybe margin covering or just fear! I think commercial property reits are going to have some problems.
Where's this "increase in interest rates" ??-
All rates except the 3 month are way down m/m, and the st - lt spread has not spread.
I guess the hedges coming off is the good news - if the hedges are against higher interest rates.