Zero Hedge has long been lukewarm on the equity prospects for REITs at current stock prices. Luckily, Simon Property Group just confirmed out pessimism. SPG announced it is raising a total of $1 billion in new stock and debt. The company will try to issue 15 million shares of common stock as well as $500 million of senior notes due 2019. Double whammy of increased dilution and leverage. This should really excite SPG's investors who are already pocketing a mere 10% of their dividends in cash. And who would be the underwriter if not the one and only Goldman Sachs.
If this isn't indictive of the liquidity problems at the REITs (of which SPG has the highest market cap by far), then nothing is. Fortunately for SPG it has a market rally to sell its dubiously valued shares into.
disclosure: long SRS
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