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A small MREIT PMC Commercial Trust (PCC) released their earnings yesterday. Apparently they specialize in "SBA 7" loans. They have been around since 1993 and were profitable for at least the last three years.

Last week we talked about Starwood (STWD) selling for a 20% premium to NAV.

PCC is selling with a 40% DISCOUNT to NAV. I am sure there is some good reason(s) why this is, but in my quick look, I did not notice it. Obviously there is only one Barry Sternlicht and one Mike Farrell and neither one of them works for PCC.

If someone wants to take the time, there is some percentage chance there is small diamond there . . .

Link to PCC Q4 report:


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i've never heard of them. SBA loan programs can provide PCC with low cost, long tenured financing. many of the BDCs i follow have qualified as SBA lenders, though i've never heard of SBA 7(a) loans, perhaps a specific category?

aside from the small cap & low float issues that could lead to P/NAV discounts, they are hurt by the amount of floating rate debt they hold. i'm not sure about PCC, by BDCs that have SBA (SBIC) financing have fixed rates (around 5% currently) that reset yearly. i didn't see any info in PCC's PR about net spreads or terms of their debt, but if/when LIBOR rates start to go up, PCC should benefit pretty well.

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