Hammerson Share Discussion Threads

[hpcg] 13/5/2020 16:23

Existing bond holders would be delighted with a rights issue, but adding more debt, when the problem is the debt load would be problematic at best. Any new debt would want to be super senior but there is protection for each class in the stack. The non-sale of the retail parks limits covenant headroom, and the non-recourse joint venture secured debt takes joint venture assets outside of the group's mortgageable assets. At best anyone buying equity now is doing so in the full knowledge they will need to double their investment to retain their share.


From 2019 annual report:

Bonds: Gearing and secured borrowings – Gearing should not exceed 150% for two of the bonds and 175% for the remaining bonds. All the bonds include a limitation that secured borrowings should not exceed 50% of equity shareholders’ funds.

Bank facilities: Gearing, secured borrowings and interest cover – Gearing should not exceed 150%, secured borrowings should not exceed 50% of equity shareholders’ funds and interest cover should be not less than 1.25 times.

Private placement senior notes: Gearing, secured borrowings, unencumbered assets and interest cover – Gearing should not exceed 150%, secured borrowings should not exceed 50% of equity shareholders’ funds, unencumbered assets should not be less than 150% of net unsecured borrowings and interest cover should be not less than 1.25 times.

The Group’s financial ratios are comfortably within these covenants. The valuation of the Group’s property portfolio at 31 December 2019, on a pro forma basis for the disposals announced on 21 February 2020 (the portfolio of seven retail parks and Abbey Retail Park, Belfast), would have to fall by 28%, or 45% for the UK portfolio only, to breach the unencumbered asset covenant in the private placement senior notes. Valuations would have to fall by 32% (UK only 65%) on a pro forma basis to breach the Group’s tightest gearing covenant. Net rental income would need to fall by 64% in order to breach the interest cover covenant in the Group’s bank facilities and private placement notes. Further disposals will act to increase this headroom. In addition, some joint ventures and associates have secured debt facilities which include specific covenants to those properties, including covenants for loan to value and interest cover. This secured debt is non-recourse to the Group.

[researchcentre123] 13/5/2020 15:36

hxxps://www.morningstar.co.uk/uk/news/AN_1589370603155899400/moodys-downgrades-hammerson-ratings-to-baa2%3B-outlook-under-review.aspx&ct=ga&cd=CAEYACoUMTc1OTMwODk0OTI4MzI0Nzg1MzUyHGU3YjdjZDMwMDMyZjg5ZmU6Y28udWs6ZW46R0I&usg=AFQjCNHVqXG-MiGGcpcHKQbV60rYOcgcqw. I don't think this is unexpected and not sure in reality it makes any difference at this point

[researchcentre123] 13/5/2020 15:28

That's good news sicknote- just what we need

[riostroy] 13/5/2020 14:55

Today we was supposed to see a recovery but thanks America we are going to close negative again

[riostroy] 13/5/2020 14:47

Government is too slow - by that time share price crash by how much?

[s34icknote] 13/5/2020 14:42

Landlords are reportedly in talks with the government to see if unpaid retail rent bills due to the coronavirus pandemic could be placed on a furlough scheme of sorts.According to The Telegraph, the UK Government is considering a "furloughed space grant scheme" proposal, with ­officials inviting industry leaders last week to help prepare a rescue plan.The scheme could see taxpayers subsidise the rent bills for "furloughed" shops and restaurants in the pandemic recession as tensions grow between landlords and troubled retailers.Sicknote

[bolador] 13/5/2020 14:08

for fun,

"Buy Hammerson. Stay Long. Make Money"

Gov stock puff...

[s34icknote] 13/5/2020 14:04

They saved 113 million in final div , and 21 million from Orion , Isn't that 6 months rent ??What's the full div together ? 25p being paying out over last five years ???Dividend reduced to 14 p ? Markets are run on fear !For the shooters to profit on the way down and back up again .This was 300 p in January .And turned down 625p bid in 2018.I would not be surprised to see a bid at 1.50 to 2.00 ?Sicknote

[researchcentre123] 13/5/2020 13:14

Wld you be betting on a house going down in price if it had been £1m a couple of months ago and now you can get it for 80k? I don't think I'd be saying "I'll wait for it to go down" but thats what the shorters are doing. Net asset value 1200% share price? This is not a dotcom - it has been around for 70 years, has hard assets that will be here in 50 years and worth vastly more then given inflation. Don't think I'll be betting against history....

[researchcentre123] 13/5/2020 13:14

Wld you be betting on a house going down in price if it had been £1m a couple of months ago and now you can get it for 80k? I don't think I'd be saying "I'll wait for it to go down" but thats what the shorters are doing. Net asset value 1200% share price? This is not a dotcom - it has been around for 70 years, has hard assets that will be here in 50 years and worth vastly more then given inflation. Don't think I'll be betting against history....

[sr2day] 13/5/2020 12:32

holders should take their cue from lighthouse capital who has been adding the last few days and not panicking.Pressure is on the shorters.

[ny boy] 13/5/2020 12:22

It’s a bear trap, slightly disappointing but added some more today, tucked them all away for a year then review. Stay patient, many panic sell, thinking the World is ending every week

[researchcentre123] 13/5/2020 12:01

Well wld make sense. Sooner or later all this money that's being printed had to go somewhere and historically it's been property

[trcml] 13/5/2020 11:47

For just GBP 355.56M, a shrewd buyer could have the lot: sell the retail park portfolio and get their money back. So too could HMSO if it were to take itself private. But I would think around GBP 2.00 a share could clinch it.

[sr2day] 13/5/2020 11:40

massive short squeeze imminent.retail parks is the future.who wants to be confined and isolated for the rest of their lives.this is a lifetime opportunity and lighthouse capital is seizing it.

[researchcentre123] 13/5/2020 11:17

Yes Bolador rights issue and bonds make sense. I guess we'll see how they progress. I was quite pleased they were repurposing the empty space not taken by next with leisure. I think there's some go left in retail for a while but they're moving with the times which is what property is about.

[researchcentre123] 13/5/2020 10:50

Lighthouse can see the numbers make sense. They are real estate professionals and keep buying. I think what we have here is a difference between short term speculators and long term investors - and long term views almost always win

[bolador] 13/5/2020 10:46

Thanks Research,


As one broker recently said the company is a head scratcher. I bet there a few hedgies around who are scratching their heads wondering how they can get at that nav by cutting out the current shareholders.

The best solution for shareholders must be a rights issue tied in with a bond thus limiting dilution.
In a situation like this it is sometimes possible to ignore the share price and place stock above the market price because the fact of the issue secures the company and thus the nav.
Elsewhere there has been one such issue this year, 15% above the mkt.

[mcbull] 13/5/2020 10:21

Thanks Research,

Added more

[researchcentre123] 13/5/2020 10:12

If they have a rights issue then cashflow issues are over and price should soar. Their only issue is short-term cash.

[okosling] 13/5/2020 10:11

Total short interest on HMSO is now 11.14%, the second highest of any company on the London Stock Exchange. The biggest shorter is Caxton with 4.33%. Check out this link to see how shrewd Caxton have (not) been in the last couple of years:
hxxps://news.efinancialcareers.com/uk-en/3002412/caxton-associates-europe-loss
11.14% is a huge amount of shares which must be bought by shorters at some point to square their positions.

[researchcentre123] 13/5/2020 10:05

Actually by my calculations this is by far the cheapest stock anywhere as regards net asset value (which is by far the most important thing in property). I hope they do have a rights issue so I can buy more at an even greater discount.

[researchcentre123] 13/5/2020 09:41

If you look at the last recession, the policy of banks like Barclays was to let pple sell their own non-performing or underwater assets as they were likely to get better prices. The Tomlinson report was highly critical of any that didn't do that and bankers deliberately repossessing at HBO's ended up in jail. I think Hammerson will be able to work out their problems

[researchcentre123] 13/5/2020 09:25

If you allow for 50% you're still in the money. (7.315bn/2-2.938bn)/.335bn=2.147 ie 214%. However I don't see a 50% drop. Property investors are long term not like many stock investors and see there will be asset inflation coming with all the quantitative easing