No. of Recommendations: 2
I guess we ignore that 45% is floating rate and focus on maturities.
No we don't ignore and thank you for pointing out that a big chunk is floating rate. In fact, a lot bigger than 45%. They say they can manage, we will see. If they default on any of their 29 trophy assets, it will be serious blow to their credibility and increase borrowing costs even more.
From 2022 annual report:
Approximately 62% of our outstanding debt obligations at December 31, 2022 are floating rate debt compared to 48%
at December 31, 2021. This debt is subject to fluctuations in interest rates. A 100 basis point increase in interest rates relating to
our corporate and commercial floating rate debt obligations would result in an increase in annual interest expense of
approximately $367 million. A 100 basis point increase in interest rates relating to fixed rate debt obligations due within one
year would result in an increase in annual interest expense of approximately $35 million upon refinancing. In addition, we have
exposure to interest rates within our equity accounted investments. We have mitigated, to some extent, the exposure to interest
rate fluctuations through interest rate derivative contracts. Refer to Note 31, Financial Instruments in our annual 2022 financial
statements for further information.
At December 31, 2022, our consolidated debt to capitalization was 57% (December 31, 2021 ' 52%). Capitalization
includes debt obligations, capital securities and total equity. It is our view this level of indebtedness is conservative given the
cash flow characteristics of our properties and the fair value of our assets. Based on this, we believe that all debts will be
financed or repaid as they come due in the foreseeable future.
