I cant see anything wrong with defaulting on this asset's loan (and losing the asset in the process).
City Mall's loan had the highest interest rate (5.9%) and had suffered a massive fall in income (90%) due to a fall in occupancy.
With this lemon and associated debt out of the way this should IMPROVE income, debt and the NTA (and say farewell to King Kebab whoever mentioned it before).
With the exception of the working capital finance facility (which id say is in the bag for extension) nothing else is due for the next year and a half and even then its the properties in Germany which are close to if not below the covenant. And let me remind you that the average interest rate paid on AEZ loans is a respectable 4.8% (respectable say compared to GJTs 15% rate) and that all its debt is at an individual property level.
With that default out of the way we can now concentrate on the companies growth and the shares growth.
Its 2.3-2.5 cents for an NTA of 16 for Christ sakes! And with Germany (where 43% of AEZs property portfolio is) is looking like steadily growing with a GDP approaching 2 for 2011, Spain improving (29% of portfolio) at 0.6 GDP forecast for 2011and Greece (21% portfolio) slightly improving its poor position F2011 -1.9 GDP growth AEZ looks safe to me.
Have i missed something?
Perhaps hightrax was looking for a lower entry point??!
AEZ Price at posting:
2.5¢ Sentiment: Buy Disclosure: Held
