Getting Paid to Wait for Deleveraging
•February 17, 2026
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Why It Matters
Understanding this deleveraging strategy highlights how distressed‑yet‑stable REITs can provide attractive yields while managing risk through asset sales and debt reduction. For income‑focused investors, the episode offers insight into evaluating high‑yield bonds that balance current cash flow with a clear roadmap to financial health, making it especially relevant in a market seeking yield amid tightening credit conditions.
Getting Paid to Wait for Deleveraging
A REIT bond now trades with a yield above 7% and a spread around 340 bps over Treasuries, despite solid core markets and improving leasing trends. The issuer is actively selling $280–300m of properties and directing most of the proceeds straight into debt reduction and potential bond buybacks, with several deals already in advanced stages. More than half of its outstanding bonds carry coupons above 8%, setting up meaningful interest savings as management refinances into a lower‑cost stack over time. Liquidity sits above $600m, with no unsecured maturities until late 2027, giving the balance sheet room to heal. This bond offers an opportunity to capture high income while betting not only on repayment but also on a credible path back toward investment‑grade metrics.
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