bforsberg

Inhospitable Value at Hospitality Properties Trust

I agree that the way to play HPT is with the preferred dividend. I like especially the series B preferred HPT-B. It is past its call date so can be called anytime. When it is called you will get $25 per share. Also with preferreds they can't reduce the dividend until they eliminate the common share dividend.

It baffles me as to why HPT has not called the HPT-B preferred yet. Since it was issued at 8.875% and currently LIBOR plus the spread that HPT pays on its floater means it only needs to pay 3.0 to 3.5 % on this if they would call the 3.5M shares and place this dept on their floater they could reduce the cost of this "loan" from 8.875% to 3.0 to 3.5% on 3.5M shares at $25 per share. This would save about $3.5M per year.

Remember that HPT made it through 9/11 without reducing their dividend so don't count them out yet.