CQE 1.04% $2.85 charter hall social infrastructure reit

loan is in aud not usd

  1. DSD
    15,757 Posts.
    The report for FY08 gives the impression the loan of 260m is in USD and hedged at 77%. A trading colleague and fellow holder rang AEU yesterday and spoke with a director. The loan is in AUD. The hedging was against an increase in interest rates. Since 30/06/08 hedging and been reduced and as each loan expires it is being renogoaited at far lower interest rates. Hence, Main expense for AEU is decreasing!! AEU have stopped expansion and have sold some centres. Currently own 435 child care centres freehold across the country and NZ. ABC is their main tenant. AEU have had substantial number of enquiries from operators of other centres wanting to operate in place of ABC. AEU are in regular contact with Fed govt and no centre is expected to close. Management know the the 50% fed subsidy provides solid income stream and are standing by their book value of 1.49/share for the freehold properties all of which are up-to-date with the rent. SP of 18c is ridiculously cheap when compared with book value and strong qrtly divs from rental income. Oversold due to chaos surrounding ABC. But govt are determined no centres will close and have offerred 22m grant to keep ABC operating. Huge buying opportunity IMO and expect SP to rebound when normalcy returns.
 
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