Lemsicals
2023-07-28

$MANULIFE US REIT(BTOU.SI)$ is an interesting play. Under US Tax Law, for a US REIT to be a REIT, it MUST pay 90% of its taxable income to unit holders. If they don't, they will pay tax. If Lenders prevent the payment of dividends, this could spiral out of control. I might jump in if I think the REIT will survive but I wouldn't go in for anything more than 7 cents. It's still overvalued. 

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Comments

  • ud0m
    2023-08-01
    ud0m
    Do you think there will be dividends ?
    • Lemsicals: 
      It’s really hard to say but there is a very serious risk that they will stop dividends. A lot depends on the debt holders higher above in capital structure.
  • Agxm
    2023-08-24
    Agxm
    So how now?
    • Lemsicals: 
      It has indeed gone down to 7 cents as predicted but I have decided not to go in just yet (or at all). The Fed will likely still have another rate rise before the end of the year which will impact valuation in December. Their valuation will still go down even more in December with or without rate rise. Two additional things worry me: 1) they have not taken dilution off the table despite low price 2) the negotiations with the banks is taking a long long time. The bank negotiations is what we call “waivers and amendments.” It doesnt need to take this long so I smell trouble. My new price target is 3 cents.
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