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Cadiz Inc. Message Board

xds58 10 posts  |  Last Activity: Mar 11, 2014 1:16 PM Member since: Mar 26, 2002
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  • Reply to

    Sevenshire next and Sixborough after?

    by gtw999 Mar 11, 2014 12:44 PM
    xds58 xds58 Mar 11, 2014 1:16 PM Flag

    meanwhile IRT trends up - best I can tell the price moves are noise - at these prices, RAS prob. the better deal of the IRT/RAS combo, given they are the direct beneficiary of IRT plans to continue growing through acquisition, somewhat irrespective of IRT stock price -

  • Have you come across whether RAS intends to take its IRT dividends as cash or shares? Would seem like shares the more advantageous right now -

  • Sorry missed your prior note on sequential trends.

    Do you have other income holdings you like (aside from IRT)? I'm finding it to be increasingly slim pickings.

  • Reply to

    More on Taberna

    by xds58 Feb 26, 2014 5:34 PM
    xds58 xds58 Feb 26, 2014 5:46 PM Flag

    One other note - if you look at the 10-Qs in sequence, you can see the collateral value and defaulted collateral value are steadily falling - presumably at some point that indicates the senior debt holders have been paid out - just not entirely clear when that is -

  • I think we can figure out some things from the language in the 10-Q, "Taberna VIII—Taberna VIII has $484.0 million of total collateral at par value, of which $49.3 million is defaulted. The current OC test is failing at 80.9% with an OC trigger of 103.5%. We currently own $40.0 million of the securities that were originally rated investment grade and $93.0 million of the non-investment grade securities issued by this securitization. We do not expect to receive any distributions from this securitization other than our senior management fees for the foreseeable future. "

    This is how I interpret the above - just my reading, so maybe I'm missing something

    Total collateral: $484 million
    Defaulted Collateral: $49 million
    Performing collateral: $435 million
    RAS participation: $133 million
    Theoretic current value to RAS if no more collateral defaults: ($133 - $49) = $84 million

    Even if there are some additional defaults, there is a positive offset as interest accrues. So for example, if underlying collateral is defaulting at roughly a 5% annual rate, and that is the approximate yield on the collateral, it should be close to a wash. If the default rate is lower than the yield, RAS' expectation of eventual cash realization will increase.

    One thing which is a little unclear though is the implication of the OC Test coming in at 80%. I am assuming the test is a ratio of performing collateral ($435 million) to total liabilities, including those due to RAS. 80% coverage on $435 performing collateral implies $544 mil total outstanding, which would imply a much smaller residual for RAS.

    A balance sheet (with par values as opposed to market) would clarify this.

  • Reply to

    The 4Q results: a quick overview

    by davisfoulger Feb 20, 2014 12:37 PM
    xds58 xds58 Feb 20, 2014 4:14 PM Flag

    not sure you can extrapolate higher delinquincies from the higher allowance expense - it may be that they were over-reserved before and now they are on a more of a normalized run rate - note that non-accrual loans continue to fall on absolute basis and as percent of total loans.

  • Reply to

    Earnings

    by needoptions Feb 20, 2014 9:30 AM
    xds58 xds58 Feb 20, 2014 11:17 AM Flag

    actually, I think as others mention here, the quarter was ok - my sense is the stock reaction is to the commentary that spreads have narrowed on conduit loans - that's a constraint on growth, and if it lasts a long time on overall profitability, as maturing loans get re-booked at lower spreads -

    someone asked about the 'writedown' leading to the GAAP loss - I believe this is actually a 'write-up' of liabilities, meaning expectation of collection has increased (RAS reports Taberna liabilities at market, not book) -

    my end of day take is valuation may have gotten a little stretched relative to RAS' view of BV/share, and this prob. is reality setting in - they will provide 2014 guidance soon and that will probably be equally important in share price direction -

    all things equal, I'm inclined to like IRT a bit more at this point - I think the owned business is fundamentally a better business, although structurally would prefer to own the manager (RAS)

  • Reply to

    What the &$@# did Cadiz do?

    by potatochipla Feb 3, 2014 11:00 AM
    xds58 xds58 Feb 6, 2014 4:02 PM Flag

    I went back and ran these numbers - if you think the stock is fairly valued around 7 (or cheap I guess), they are essentially receiving $5 mil net of stock value, but will have to repay 12.6 mil in three years, inclusive of the 8% div accrual - that's a 36% rate of compounding. Not sure where you get 12-13%.

  • Reply to

    What the &$@# did Cadiz do?

    by potatochipla Feb 3, 2014 11:00 AM
    xds58 xds58 Feb 6, 2014 3:41 PM Flag

    Hey, glad to see the old gang's here!

    I haven't tried to calculate the 12-13% number (how do you calculate that out of curiosity...seems low, if you think there is value to the equity) - anyway, the one caveat which you aren't mentioning is that the lender acquired the bulk of the debt at a discount (which I don't think has been publicly quantified) - so they may be thinking of it as a penny on the dollar speculation at this point, where they make a profit even on a partial recovery of debt -

  • Reply to

    Revenue

    by jedikn8 Feb 4, 2014 10:52 AM
    xds58 xds58 Feb 6, 2014 3:31 PM Flag

    I assume you get the $25 mil from the initial contract w SMWD - if you look at the language at the time that deal was announced, it was presented as a discounted rate because SMWD was going to be the lead customer with some associated costs. My guess is they would try to price additional deals closer to $750/acre foot, still below their original projection of a few years ago.

    I take it you're considering a short here? I closed out mine awhile back when momentum seemed to be shifting up again - and I wouldn't be surprised to see a bounce if they conclude all the lawsuits successfully this year - that would leave the Federal right of way issue (does CDZI qualify for an exemption to Federal environmental review due to its use of railway tracks), and what is likely the more difficult hurdle of whether MWD will allow access without the implementation of a very expensive filtering system for Chromium 6 contaminants.

    I was interested to see the debt sale with equity kicker - would be VERY curious to know what was presumably a vulture debt buyer paid for that debt - if its penny's on the dollar, it's another indication there isn't much here - if they actually paid substantive dollars, then maybe they see something - either some residual value, or a plausible chance project is approved with manageable economics. The recent drought clearly helps these guys, although my sense is that is more in the Northern part of the state (haven't spent much time looking into this)

CDZI
6.35-0.05(-0.78%)Apr 23 3:17 PMEDT

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