From recent update MOF appears to be tracking well.
Interesting to see that if the CMBS debt rolled over (says that they are expecting it too be) then only asset specific debt remains for foreseeable future ---> significantly reduces risk profile.
Example: Quintana Centre: MOF indicated no more capital being put into it. With asset value 108m, debt 106m (being asset specific and non-recourse) the problem is for the bank to sort out.
Irony is that if MOF walked away from Quintana and gave asset to the bank then it would actually IMPROVE the MOF balance sheet. It would:
1) Have neglible impact on NTA as comparable asset and debt removed from balance sheet
2) Will actually REDUCE gearing as this asset has 98% gearing vs. 35.6% for Trust
3) WIll INCREASE Trusts occupancy levels as Quintana Centre is only 40% ocupied.
Will be interesting to see if MOF do walk away from this asset because of 1-3 above as they could do with due to non-recourse, asset specific loan on the property.
Risks IMO of doing so would be reputational and whether other banks would readily roll over future debt on other properties...
Cheers John
MOF Price at posting:
20.0¢ Sentiment: Buy Disclosure: Held
