Alpha Pyrenees Tst Discussion

Re: Dividend down 33%

drunken sailor — Fri, 18 May 2012 15:25:00 GMT

The fact that the banks removed the LTV covenants at the depth of the banking crisis is a pretty good indication that the banks are not worried about Alpha in the slightest. Refinancing is still a way off. At the moment property values are increasing (this could change) and this is improving LTV. However it is sensible to conserve cash and I would have preferred a more honest reasoning for the Divi cut than we got.. The situation with the Euro will be making everyone a bit nervous, but the hedge insulates Alpha from a certain amount of the fall out. Business will still go on despite what happens with the Euro and they will still need premises. By drunken sailor

Re: Dividend down 33%

vksingh — Fri, 18 May 2012 10:46:00 GMT

Sorry but I do not agree. I am able to borrow at the better rate then 5% in tis environment but because I have a good credit history and assets. ALPH have obeyed the load agreements and have not defaulted. Banks are looking to loan to anyone who has a good credit. Gone are the days when you could sign a paper saying you earning £100,000 and not prove it. Today you have to prove it.

I think it will be even better rates if not the same. Was BOE base rate .5% when ALPH came to market and was ECB giving our long term loans at 1% to all banks. Lots of liquidity has been put in the system

Situation might change tomorrow but at the moment banks will lend to good business. If they do not lend how do they make money with all the limitation on what they can and cannot do. I think gradually banks are being pushed to do what they were suppose to - get deposits and make loans to credible business and people.
By vksingh

Re: Dividend down 33%

TX2 — Thu, 17 May 2012 17:14:00 GMT

We are overgeared because today you are unlikely to be able to borrow on the terms that were negotiated when ALpha came to the market,then banks especially those that have gone bust like Anglo Irish were falling over themselves to lend other peoples money longterm which they had borrowed short term,even Barclays who I believe are ALPHs lenders were nearly as reckless in their lending policies.£50m of equity and £200m of debt is simply massive gearing. Today you cannot borrow on these terms.Alph will have to increase its equity content by between £50 & £75m when it renews its loans and reduce its debt pro rata.About £1 of borrowing to £1 of equity is about as high as lenders will go these days.

Forget historic LTV covenants;it will not be able to renew on these terms.Over the next 2 years to survive ALPH has to sell properties and/or raise new equity capital to reduce LTV to present day lenders limits.It will be difficult to do this and preserve any equity for existing shareholders. By TX2

Re: Dividend down 33%

vksingh — Thu, 17 May 2012 15:57:00 GMT

Can you please explain how we are overleveraged? Our LTV is <75% when covenant test is for 87.5%

Average lease length is 8.8 Years and yield is 8.2%. Why would the banks not loan ALPH? 83% income from Grade A tenants and 91% of property is in France. With new president aiming for growth policies, we should see better conditions and growth.

Following is from todays update:
FINANCING

The Trust's total borrowings of £202.7m (€243.0m) and portfolio value of £254.7m (€305.4m) gives a net leverage after cash of 74.2% as at 31 March 2012.

All borrowings are long term, with maturity in February 2015 and 99% of borrowings have interest rates that are fixed to maturity at a weighted average rate of 5.26% per annum. There are no Loan to Value ("LTV") covenant tests until February 2014, at which point the Trust's LTV should not exceed 87.5% on a country portfolio basis. The French (€221.1m) and Spanish (€21.9m) borrowings are independent and are not cross-collateralised. By vksingh

Re: Dividend down 33%

TX2 — Thu, 17 May 2012 15:50:00 GMT

I probably would not be if I earned the wage he does from this company and perhaps the management fee!Obviously Richgm I hope you are right - its just that history is not on our side regarding share performance here..... By TX2

Re: Dividend down 33%

Richygm — Thu, 17 May 2012 14:39:00 GMT

TX2, a director bought over 40k worth a short time ago. He obviously wasn't too worried. By Richygm

Re: Dividend down 33%

TX2 — Thu, 17 May 2012 14:14:00 GMT

They need to SELL property not buy,ALPH is hugely overgeared.There is a 50% chance that no value will be returned to shareholders.I suspect it is already having its arm twisted by lenders I would not be suprised to see divi cut to zero; the prospects of debt renewal on reasonable terms to existing shareholders are fairly thin.I would avoid further exposure.My exposure here is under 0.5% of my total portfolio so I am letting run but I dont like this share and its prospects. By TX2

Re: Dividend down 33%

vksingh — Thu, 17 May 2012 10:18:00 GMT

I sense just planning. Keep some powder dry in case monies required in Feb 2014. Also things are in panic and they might get a oppoortunity to buy more property in France. I would have done the same if I was thinking for a good long term retrun.

Still a good yield and I would buy more soon By vksingh

Re: Dividend down 33%

TX2 — Thu, 17 May 2012 07:58:00 GMT

.....and the reason given for cut does not seem plausible either- or at least the taking of value added opportunities part!I have a few and consider it a weak hold and not a buy in any circumstances in todays market even prior to the cut. By TX2

Re: Dividend down 33%

the old trout — Thu, 17 May 2012 07:57:00 GMT

Still an excellent yield at this price, and already priced in IMHO.

Tot By the old trout

Dividend down 33%

whilstev — Thu, 17 May 2012 07:11:00 GMT

Well we have our answer. By whilstev

Re: Painful (nt)

whilstev — Fri, 11 May 2012 10:17:00 GMT

The dividend yield is now 15% , cant see this situation continuing indefinately. Either the divi is going to be cut or the share price will recover , hopefully the latter. By whilstev

Re: Painful (nt)

drunken sailor — Fri, 11 May 2012 09:49:00 GMT

The falling Euro should not be a problem, that is what the currenct hedge is there to mittigate. I think it has more to do with the financial situation in Spain and the political situation in France, neither of which should have a significant impact on revenue. By drunken sailor

Re: Painful (nt)

whilstev — Fri, 11 May 2012 09:10:00 GMT

Yes seems to be falling with the euro. Next week will tell us whether the div can be maintained then we may get a bit of a rebound. By whilstev

Painful (nt)

Richygm — Thu, 10 May 2012 14:58:00 GMT

no text. By Richygm