Tritax Eurobox Share Discussion Threads

[skyship] 04/7/2023 08:26

Epi - to what are you referring? Physical property or particular French listed propcos?

If the latter, which specifically?

[epistrophy] 03/7/2023 10:24

Anyone brave enough to buy Paris commercial property? Getting tempted at a 10% (unlevered) cashflow yield.

[williamcooper104] 01/7/2023 14:50

If they refinanced it today it would be current YTM plus a new issue premium of c25bps It's likely to be lower in a few years; whether it'a enough to cover the divi is open to question

[nickrl] 01/7/2023 13:54

@WC indeed refinancing that bond is going to be at least treble todays rate at best In some respects EBOX with its extraordinarily low overall rate is more exposed than those with double the average rates in terms of how much extra finance costs they will have to absorb. Anyhow we've a few years to run and as they say anything could happen and probably will to where rates end up over the next few years.

[skyship] 01/7/2023 13:51

& could you please explain your reasoning here:

"But they’ve got junk bond yields and they need to get those under control - hence focus on de-leveraging"

[skyship] 01/7/2023 13:46

Jeez WC - I do wish you would stop harping on about redemptions a full year ahead of actual maturity. I understand your reasoning, but also reject it totally. You do not have to deal with debt a full year ahead of expiry to prevent your accounts being qualified - period!

The E500m Green Bond matures Jun'26 - in 3yrs time! Who knows where interest rates will be by then; but likely for sure to be a whole lot lower than where we are today.

[williamcooper104] 01/7/2023 13:30

They've also to refinance their 2026 bond in 2025 so only really two years left on that

[nickrl] 01/7/2023 11:56

@WC the bonds are on very low IR's though its the RCF that will need extra cash once the hedges roll off in Oct 23. They will go from c 0.65% + margin to 3.6% + margin unless they replace it which adds cE4m to finance charges based on RCF drawn and future capital commitments. They can accommodate this as NRI is stepping up from acquisitions as well as from embedded index linking so divi will remain covered by free cash. These are the best on divi coverage compared to their peers in big box so curious they are being hammered down so much.

[williamcooper104] 01/7/2023 10:58

They should cut the divi and buy back bonds

[williamcooper104] 01/7/2023 10:57

Yep euro rates haven't spiked as much But they've got junk bond yields and they need to get those under control - hence focus on de-leveraging

[riverman77] 01/7/2023 10:46

Also remember that their debt is in euros so not exposed to the spike in UK rates which has going to hurt many of the UK focused REITs.

[skyship] 01/7/2023 09:15

Wc - "that plus the caps expiring this October means they’ve got not a lot of runway before higher rates kick in".

The caps maturing Oct '23 are solely on the £250m RCF, £130m of which is undrawn and uncommitted. Overall Debt cost last year was 1.22%; current run rate 1.46%; and f/c for nest year "somewhere between these two figures".

EBOX is in a great B/S position; yet another reason not to comprehend the current absurd share price weakness.

[hindsight] 30/6/2023 18:11

Thanks, I have added EBOX 0.95% 02/06/2026 to my possible homes list for the cash due from the calls for BOI and BUR2
I just worry all these short dated bonds wont capture the post peak rates falls from the world recession coming down the track

[williamcooper104] 30/6/2023 17:24

There's an advantage over refinancing a bank loan over a bond in that once you refinance the bank loan early you've still got the swap to give you interest rate protection Whereas with a bond you lose your rate protection with no compensation once you redeem Material recourse loans need to be refinanced at least 12 months before final maturity to avoid going concern audit issues (and the equity market freaking out) So EBOXs 2026 bond is highly likely to be repaid in 2025; that plus the caps expiring this October means they've got not a lot of runway before higher rates kick in

[riverman77] 30/6/2023 16:26

From memory, SUPR have more immediate refinancing requirements than I'd like, so less keen on that than EBOX. You really don't want to be having to refinance in the next couple of years.

[cwa1] 30/6/2023 16:12

Looks like BoA are reducing:-

[ghhghh] 30/6/2023 12:12

I posted this yesterday on the Commercial Prop thread.


Interesting Note out from Jefferies on Euro REITs.

It grades the main REITs on covenant headroom and then operational risk.

Covenant headroom is a bit misleading since some REITs are still Dec 22 NAV's, others March 23.

On covenant headroom Big Yellow 23 way out in front with about 70%. Then Derwent 22, GPE 23. BBOX 22, Impact 23, Landsec 23, Workspace 23, Segro 22, Unite 22 and SUPR 22.

This lot all over 45%

EBOX is second from bottom with 25%.

However when they evaluate operational risk, this switches with EBOX in the lowest risk bucket (out of four buckets). SUPR also in this bucket.

IMO this supports EBOX as best risk reward play in the sector since the high gearing (reason for low headroom) means most upside when interest cycle turns. For those wanting lower risk, SUPR also looks compelling.

[salpara111] 30/6/2023 11:59

Been watching this for a while and am as confused as most people here.
The only thing that you can say with any degree of certainty is that the market will always overshoot in both directions.
They look to be in a comfortable position in terms of LTV and debt maturity profile/interest rates.
The $64K question I guess is the big macroeconomic one......will we see a global recession and if so how bad will it be. The USA yield curve is heavily inverted at present which is a very good leading indicator of recession however it is not good at indicating when the recession might arrive!
I set a limit order to buy here at 50.5 so have not been filled yet.

[skinny] 30/6/2023 11:07

Shortracker :-

"We no longer track disclosures after they drop below 0.5%. It is possible that the manager still holds a short position even if we are showing it as zero."

[skyship] 30/6/2023 10:46

Skinny - ? What is 0.5% please.

At today's 51p the discount is a massive 44.1% and the yield an equally massive 8.51%!

[skinny] 30/6/2023 10:33

Yes its 0.5%.

8.4% prospective return now.

[cc2014] 30/6/2023 10:24

@AlanPT It does indeed seem a strange time to short it, athough I tend to distrust RNS's of this type as being produced on a timely basis. Shortracker shows no short interest either, although if I remember it only reports shorts over a certain threshold.

Perhaps the short is not new, but instead the previous lender has sold their shares and the brokers have turned to Aviva?

Either way the share price is not pretty and it's down significantly in recent weeks.

The question for me is whether the new shareholders are long term sticky holders or just short term buying the dip and will be out the instant (if) it gets back to 55p.

[williamcooper104] 29/6/2023 22:24

BTL - 3 something probably not unreasonable if the gross yield is 4.5-5

[williamcooper104] 29/6/2023 22:02

The YTM on the 2026 bond has shot up to 7.1 Was low 6s a few weeks ago (it's been quite volatile over last few months) Looks like, from a quick eye ball, a fair bit of correlation between the 26 bond yield and the share price 7.1 v high for euro debt Thinking of ASLI equity and EBOX debt