Rich Hill

Rich Hill from Morgan Stanley asked for an update on capital allocation strategy, particularly concerning the balance sheet, including options like refinancing, loan modifications, and senior unsecured note buybacks.

Answer

CEO Stephen Lebovitz emphasized that improving the balance sheet is a top priority, guided by the new Capital Allocation Committee. He stated the immediate focus is on secured debt maturing in 2020 and 2021, highlighting the recent payoff of two loans with 25% debt yields. He also noted that suspending the dividend was a difficult but necessary decision to preserve cash for redevelopments and revenue stabilization.

Rich Hill asked for an update on the company's capital allocation strategy, specifically concerning balance sheet options like refinancing, loan modifications, and potential debt buybacks.

Answer

CEO Stephen Lebovitz stated that improving the balance sheet is a top priority, with the immediate focus on addressing secured debt maturities in 2020 and 2021. He highlighted the recent payoff of two loans with high debt yields to increase the unencumbered asset pool and emphasized that suspending dividends was a difficult but necessary decision to preserve cash for redevelopments and leasing.

Richard Hill from Morgan Stanley followed up on the capital-allocation committee, asking if Michael Ashner's expertise in debt markets might lead to a more aggressive debt renegotiation strategy. He also questioned the capital allocation decision between property redevelopment and buying back high-yielding bonds.

Answer

CEO Stephen Lebovitz stated that while Michael Ashner's experience is welcome, he does not foresee a significant change in the company's debt strategy, emphasizing they have already been aggressive. Lebovitz reiterated that the primary focus remains on investing in property redevelopments due to their direct and ancillary financial returns, and that buying back bonds is not a strategy they are pursuing at this time.

Richard Hill from Morgan Stanley asked if the involvement of Michael Ashner on the new capital-allocation committee would lead to a more aggressive debt renegotiation strategy. He also inquired about the capital allocation decision between buying back bonds versus funding redevelopments.

Answer

CEO Stephen Lebovitz stated that while the company welcomes Michael Ashner's experience, he does not foresee a significant change in its debt strategy. He reiterated that the primary focus for capital is investing in property redevelopments due to their direct financial returns and ancillary benefits. Lebovitz noted that buying back bonds is not a strategy the company is currently pursuing.