Q: So NWH.UN announced a successful debenture issue today which will have the effect of reducing interest expense. On the surface this seems like good news, but I am wondering why someone would buy it. The interest rate is lower than the dividend yield and the convertible price is still about $2 higher than currently trading. I can see buying this if you were convinced there was going to be a dividend cut, but I doubt that will be the case at least in the near term given managements stated recent focus. What am I missing? Why would someone buy this debenture? I am an income investor and have a 2% weighting and am thinking of increasing it to 5%…..if I can figure out an answer to my question. Would you be ok with a 5% weighting in this stock under these circumstances?
Thanks in advance. Love the service.
Thanks in advance. Love the service.