mariner_admin, 28 July 2020
We believe that the COVID-19 pandemic will accelerate the stresses already hidden in TF’s portfolio and expose TF’s underwriting and financing strategy. We believe that Timbercreek is grossly underprovisioned compared to its small-cap MIC peers – its current loan provision is 73% below the peer average – unusual to say the least. While its peers have taken actions to protect their balance sheets, TF has not, and we believe the dividend is at risk.
In this report, we unveil two large exposures that collectively account for 14% of book value today – we believe they were significantly underprovisioned and that investors were inadequately informed about the issues at these properties – these assets were “sold” in a manner that, in our opinion, allowed TF to avoid taking appropriate provisions (our diligence, presented below, shows these “sales”).
Continue reading “Article: Timbercreek Financial (TF) – a tenuous business model with hidden balance sheet risks (50% base case downside)”
