Frasers Centrepoint Trust: UOB Kay Hian's BUY Call Ignores a Two-Gate Balance Sheet Problem 🦖

FCT just sold White Sands for an 8.4% premium and every broker headline reads like a clean-up win. What caught my eye was not the premium, it was what happened to the balance sheet after sacrificing 6.9% of group NPI to get there. Even after applying roughly S$454 million of net proceeds to repay debt, pro forma gearing only drops from 40% to 36.5%, and interest cover is still stuck below 4 times.

If you hold FCT for retirement income, the yield near 5.4% to 5.6% looks comforting until you line it up against that 36.5% gearing and a 3.59x interest coverage ratio. The White Sands sale buys time, it does not remove the need for further deleveraging if you want your distributions to survive a nasty SORA spike.

📺 YouTube: https://youtu.be/vNUXRt_a0XA

📩 Substack: https://investingiguana.com/p/frasers-centrepoint-trust-uob-kay

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What caught my eye was not the premium, it was what happened to the balance sheet after sacrificing 6.9% of group NPI to get there. Even after applying roughly S$454 million of net proceeds to repay debt, pro forma gearing only drops from 40% to 36.5%, and interest cover is still stuck below 4 times.\nIf you hold FCT for retirement income, the yield near 5.4% to 5.6% looks comforting until you line it up against that 36.5% gearing and a 3.59x interest coverage ratio. The White Sands sale buys time, it does not remove the need for further deleveraging if you want your distributions to survive a nasty SORA spike.\n📺 YouTube: https://youtu.be/vNUXRt_a0XA\n📩 Substack: https://investingiguana.com/p/frasers-centrepoint-trust-uob-kay</body></html>","htmlText":"<html><head></head><body>\n<img src=\"https://community-static.tradeup.com/news/6d467f4f6ee457c902f0f73424742160\" tg-width=\"1920\" tg-height=\"1080\">\nFrasers Centrepoint Trust: UOB Kay Hian's BUY Call Ignores a Two-Gate Balance Sheet Problem 🦖\nFCT just sold White Sands for an 8.4% premium and every broker headline reads like a clean-up win. What caught my eye was not the premium, it was what happened to the balance sheet after sacrificing 6.9% of group NPI to get there. Even after applying roughly S$454 million of net proceeds to repay debt, pro forma gearing only drops from 40% to 36.5%, and interest cover is still stuck below 4 times.\nIf you hold FCT for retirement income, the yield near 5.4% to 5.6% looks comforting until you line it up against that 36.5% gearing and a 3.59x interest coverage ratio. The White Sands sale buys time, it does not remove the need for further deleveraging if you want your distributions to survive a nasty SORA spike.\n📺 YouTube: https://youtu.be/vNUXRt_a0XA\n📩 Substack: https://investingiguana.com/p/frasers-centrepoint-trust-uob-kay</body></html>","text":"Frasers Centrepoint Trust: UOB Kay Hian's BUY Call Ignores a Two-Gate Balance Sheet Problem 🦖 FCT just sold White Sands for an 8.4% premium and every broker headline reads like a clean-up win. What caught my eye was not the premium, it was what happened to the balance sheet after sacrificing 6.9% of group NPI to get there. Even after applying roughly S$454 million of net proceeds to repay debt, pro forma gearing only drops from 40% to 36.5%, and interest cover is still stuck below 4 times. If you hold FCT for retirement income, the yield near 5.4% to 5.6% looks comforting until you line it up against that 36.5% gearing and a 3.59x interest coverage ratio. The White Sands sale buys time, it does not remove the need for further deleveraging if you want your distributions to survive a nasty SORA spike. 📺 YouTube: https://youtu.be/vNUXRt_a0XA 📩 Substack: https://investingiguana.com/p/frasers-centrepoint-trust-uob-kay","highlighted":1,"essential":1,"paper":2,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/583966560624872","repostId":0,"isVote":1,"tweetType":1,"viewCount":82,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":780,"optionInvolvedFlag":false,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/583966560624872"}