Saizen REIT's CEO, Chang Sean Pey, bought 197,000 warrants today from 7c to 7.5c a piece. Persistent insider buying remains a characteristic of Saizen REIT. This REIT is probably one of the most undervalued ones currently available in the Singapore stock exchange.
Successfully refinancing YK Shintoku's CMBS in future remains the strongest possible catalyst that would give Saizen REIT's units a lift up in price. Refinancing to bring down the current punitive interest rate of 7.07% to a more reasonable level would greatly improve the EPS of the REIT and, therefore, the DPU.
If the recent successful refinancing of the loan provided by Societe Generale for GK Choan, which attracts an interest rate of 3.8275% throughout its three-year term, is anything to go by, we could see the interest rate for YK Shintoku's loan in the region of 4% once it is successfully refinanced. This would save 3.07% on interest payment for Saizen REIT's largest loan in its portfolio. That would represent savings of about JPY200m a year!
The skies are clearing up for Saizen REIT and, at the moment, I do not see any storm cloud for the REIT apart from YK Shintoku's CMBS which I feel confident would dissipate in the coming months.
Other than the JPY 7.1 billion (S$108.6 million) loan of YK Shintoku (which is currently in maturity default) and the JPY 0.45 billion (S$6.9 million) loan of GK Chosei, Saizen REIT has no further loans that are due to mature in the next two financial years. This will allow the Management Team to focus on the refinancing of the loan of YK Shintoku.
Related posts:
Saizen REIT: Refinancing of loan from Soc. Gen.
Replies from AK71: All things Saizen REIT.