Tuesday 16 October 2018

Trump's floating rate liability

Trump has at least $180m in floating rate liabilities and with three >$50m loans potentially quite a lot more than that

The loans are against the better properties while others are known to lose money

But higher rates over time will squeeze NOIs, FCF and asset values lower

Much of the debt is from Deutsche, who are known to sometimes sell off credit risk, for example they could sell it to a bank like Alfa Bank

With the whole empire resting on the ability of the profitable properties to prop up the debt, the losing assets and the family's living costs, no wonder he doesnt like Powell's rate hikes

It will be interesting to watch the personalities and psychology play out as so far Powell seems more hawkish than Yellen

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