Well, if they traded dollar for dollar equal value then the most they could have raise would have been $100 million.
Bottom line, we can not tell very much based on what has been provided to us.
At 12/3/14 RAS owns this property in St Pete FL. On the books for $21.5 million. A Google search shows that the property is now being developed again. Big profit for RAS, or just getting healthy interest on a big number again?
Back in 2011 RAS issued $100 million in notes secured by AAA rait 1&2 notes and traded these notes for an equal amount of value assets from Tabernas 8.
What if that is what is now paying the extra interest on deferred payments? If that's the case, RAS is kicking butt today based on clever moves they made several years ago........
Not sure if it will ever be clearly disclosed as so much on the BS is consolidated into oblivion.
Well, we know what the loan volume was in the quarter and it was acceptable to get RAS to a healthy cash flow number........................
There was a huge jump in top line interest income and in interest margin..........if it is from defered TruPS coming to the end of their deferal period and paying all catch up payments of interest..............we will not know until we get the 10K.
Based on what they paid ($65 million) it would appear that $45 is the max they could finance, which is the existing loan number. However, it is possible that the properties without the expensive financing in place are worth more than the $65 paid, based on appraisal and cash flow numbers.
Also, based on the language it appears that there is one loan covering all five properties. It is also possible that the properties individually can be financed for more.than treating all of them as one. It will be interesting to see what they do. I am a novice that enjoys this stuff because I have a strong financial background. They do this stuff every day, and I'm they sure have a plan on how to handle this situation that was devised before they entered into the contract to buy.
Let's watch it unfold.
I only know what RAS/IRT has disclosed.
The loan is due in early 2016...April or May, I can't remember exactly.
Prepayment IS NOT PERMITTED. However, defeasement is explicitly permitted, according to the "normal rules of defeasement."
The existing loan is in a securitization that JPM seems to have sold.....somewhat irrelevant except that there is no one to negotiate with. The trustee must look after the securitization's interests and will not deviate.................
The fixed rate is 5.6X%.
Steve, your vote might be the winner, because it seems like it will cost a considerable amount to defease the mortgage. Maybe they wait until later in the year. The closer we get to the mortgage due date the cheaper it gets. Plus, for now, it doesn't seem that the ten year rate is rising.
Yes, but to defease the loan RAS must leave behind government bond collateral that would give the debt holders the same money as if the mortgage stayed in place. Two year bonds are at .35% right now. So, for it to be Even Steven, RAS would need to leave behind an extra $5 million or so. It makes it a bit less obvious that defeasment is the way to go. It does however, lock the financing in place long term, which gives some peace of mind. I've just read up on defeasment, so I am happy for anyone with greater knowledge or experience to add..........
Management has stated that they can defease the existing mortgage of $45 million at 5.6% that is due in April 2016. One wonders if locking in a reasonable rate for the next 7 to ten years is worth doing today, or roll the dice and wait until the due date to refinance at the then available rates. Thoughts?
Thanks, I just reread what was written, and I think you are right.
Knowing that great numbers are coming in Q1, I can't imagine the board holding back on a penny increase.........that would be silly.
No raise after that? I beg to differ. Theoretically, the Q1 numbers will be great based on the loan volume mentioned during the CC......................unless we are being mislead.
Also, a new securitization in April.........cheap financing and nice leverage to hold the loans on the BS.
You are right about the first and wrong about the second. The OK property has two years to run, and has an interest rate of something like 5.6%......way over market. They will defease and get a much lower rate. The St. Louis property has a 3.96% rate with 9 years to run. They can not do better than that.
Two more properties to enter into contracts to buy, according to the CC.
Assuming they close on the St. Louis property they will have used $50 million of the cash. Just $15 more to go for the next two. Then it would seem they will go back to the markets to raise more cash. Still a small cap company that is growing rapidly......
There was also 60,000+ after hours shares that traded at normal prices.
IRT just closed on the OK properties.
Need, I know you have issues with Scott, but I really haven't seen him do anything stupid. Is he to conservative for your liking................yes. Is he missing the boat on some interesting opportunities........perhaps. Is he giving away the store........nope.