REITS - Buying 1 - 2 weeks before going ex-dividend Message Board

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Strategies & Market Trends : REITS - Buying 1 - 2 weeks before going ex-dividend

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To: Mr. Sunshine who wrote (1597)	11/4/1999 11:37:00 PM
From: Richard Barron	Read Replies (1) of 2561

Steve, I believe they have a large payment due soon. With all the nursing home bankruptcies(See NHI for more news), ETT would be crushed if GHV walked, since no one would provide the gap financing. It may be hard for them to close the deals. On the other hand, it is likely that this was caused by a combination of sympathy to MT, which may cut it's dividend by 30-50% next year, and I believe LIBOR rates went up today, and since the new loans are at a premium to LIBOR, they will eat into FFO greatly. IF I were running ETT, I would attempt to liquidate 20-30% of the properties at 85% or more of book value. If so, they could get through the liquidation crunch and probably maintain an FFO rate above $1.25 and maybe above $1.40. quicken.com is a pointer to the recent press release about financing. It appears their biggest mistake was not to capitalize on low interest rates last year and pay down the bank debt by mortgaging the properties with long term low fixed rates. They were about 50% leveraged when they started, but are up above 60% now. The book value is probably still in the low to mid teens. Richard

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