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Strategies & Market Trends : Value Investing

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To: Grommit who wrote (35448)	11/19/2009 4:51:02 PM
From: E_K_S	1 Recommendation Read Replies (2) of 78751

RE: HRP $125 Million 7.50% unsecured Senior Notes Hi Grommit. Did you notice that many of the preferred share series of the REIT companies (eg. BDNpC, HRPpB, HRPpC, HRPpD, FRpK, FRpJ) rallied and approached their post March crash level highs after the announcement of the pricing of the new HRP unsecured notes. HRPT Properties Trust Prices $125 Million 7.50% Senior Notes Due 2019 Wednesday November 18, 2009 finance.yahoo.com Many of these large diversified REITs w/ commercial real estate holdings are OK and have been able to refinance their debt. The big question (in my mind) was at what price was the market going to price new debt? The answer was provided Wednesday by HRP with 10 year debt at 7.5%. Therefore both FRpJ and FRpK should trade around $24/share which would translate into an effective yield of 7.5%. I feel better about my recent purchase at $14.75/share earlier this month as you never know when you might be late to the party. Anybody who bought any of these preferred series already have a two bagger and could well be onto a three bagger once these old issues trade up to the level of these "new" HRP unsecured notes. This is just another example of an inefficient market with sellers (most likely large institutions) bailing out on fear leaving scraps for shrewd value investors to scoop up and pocket the gains. Good job for spotting the REIT trades especially those companies that offered preferred shares. EKS

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