UBS Maintains a 'Neutral' on Post Properties (PPS); Raising Estimates & PT on Refinancings

UBS maintains a 'Neutral' on Post Properties (NYSE: PPS) price target upped from $43 to $45.

UBS analyst says, "Over the last month, Post has made continued strides in its efforts to strengthen the balance sheet including the prepayment of $185mn secured debt (at 6.1%) with proceeds from a new $300mn unsecured term loan (at 3.4%). PPS also refinanced its’ $330mn LOC, reducing the spread rate +230bp to +140bp. We expect the refinancing to be up to 8% accretive to FFO, and likely not reflected in consensus. As such, we believe there remains upside to 2012 estimates which could act as a short term catalyst to shares when PPS provides initial 2012 guidance next month."

"We are adjusting our 2012 & 2013 FFO estimates from $2.10 & $2.34 to $2.24 & $2.47, respectively. In addition to the $185mn of refinancing, our model also assumes PPS pays down $96mn of unsecured notes in 2Q12 & $54mn of mortgage debt in 3Q12 with the remaining $200mn available on the term loan facility."

For an analyst ratings summary and ratings history on Post Properties click here. For more ratings news on Post Properties click here.

Shares of Post Properties closed at $42.95 yesterday.

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