(08-05-2013, 02:44 PM)CY09 Wrote: [ -> ]Just curious in its rights announcement, it mentions proceeds could be used to invest in :
(3) Equity or debt in companies with exposure to operating leases.
Do they mean companies that deal with renting out their property etc, Landlord counters, REITS etc?
The Rights proceeds this time, like the previous one, could be used to invest in
(i) High yield bonds, hybrid investments and
public equity investments;
(ii) Loans, receivables or asset-backed securities that banks are looking to divest as they continue deleveraging to improve their capital base; and
(iii) Equity or debt in companies with exposure to operating leases.
For item (iii), my take is – in general it refers to companies that are in the business of renting out any leasable assets - business equipment, manufacturing machinery, office equipment, material handling equipment, computers, tractors trailers, aircrafts, ships, trains, cars, cranes etc, (IMO, by definition, property should be included, but it is debatable).
Under the previous management, Babcock & Brown, the company had made operating lease related investments only in aircrafts (Fly Leasing and GIL Aircraft Lessor No:2) and trains (Ascendos).
Last year, the new manager, STAM, initiated investments in Asia listed equities - this Asia Equities portfolio which made up of 51 securities as at 31 March 2013, has 13% exposure to the real estate sector – it is highly likely that some of these securities are Landlord counters or REITS.
I would take it that if item (iii) does not include property, item (i) “public equity investments” does.
(Vested)
