Pershing Square Enters More Swaps in Howard Hughes

0
Pershing Square Enters More Swaps in Howard Hughes

The bottom line here is that Pershing will either pay or receive the performance difference monthly on 5.3M shares of Howard Hughes Corp (NYSE:HHC). With what he already owns in the common and warrants he received when Howard Hughes Corp (NYSE:HHC) was spun from General Growth Properties Inc (NYSE:GGP), he now has a total economic exposure to 26% of Howard Hughes Corp (NYSE:HHC)’s shares. Many will ask why he just does not buy more shares. The answer is simple, each of the parties that aided in the spin transaction signed standstill agreements that prohibited them from increasing their ownership through the purchase of additional shares/warrants. Since there are no LEAPS in Howard Hughes Corp (NYSE:HHC), this is the only remaining avenue to participate in what he obviously feels is share price appreciation over the next couple years

Howard Hughes Corp (NYSE:HHC) has increased all our ownership percentage through the repurchasing of outstanding warrants.

From the 13D/A

This Top Energy And Infrastructure Fund Is Bullish On U.S. Utilities

UtilitiesThe Electron Global Fund was up 2% for September, bringing its third-quarter return to -1.7% and its year-to-date return to 8.5%. Meanwhile, the MSCI World Utilities Index was down 7.2% for September, 1.7% for the third quarter and 3.3% year to date. The S&P 500 was down 4.8% for September, up 0.2% for the third Read More

On December 31, 2013, certain of the Reporting Persons entered into swaps for the benefit of certain Pershing Square Funds. Under the terms of the swaps, (i) the relevant Pershing Square Funds will be obligated to pay to the bank counterparty any negative price performance of the 5,399,839 notional number of Common Shares subject to the swaps as of the expiration date of such swaps, plus interest rates set forth in the applicable contracts, and (ii) the bank counterparty will be obligated to pay the relevant Pershing Square Funds any positive price performance of the 5,399,839 notional number Common Shares subject to the swaps as of the expiration date of the swaps. During the term of the swaps, cash will be paid by the bank counterparty to the relevant Pershing Square Fund in an amount equal to the amount of notional distributions or dividends paid by the Issuer in respect of such notional number of Common Shares. All balances will be settled in cash. The Pershing Square Funds’ counterparties for the swaps include entities related to Citibank, Nomura, Société Générale and UBS. The swaps do not give the Reporting Persons direct or indirect voting, investment or dispositive control over any securities of the Issuer and do not require the counterparty thereto to acquire, hold, vote or dispose of any securities of the Issuer. Accordingly, the Reporting Persons disclaim any beneficial ownership of any Common Shares that may be referenced in the swap contracts or Common Shares or other securities or financial instruments that may be held from time to time by any counterparty to the contracts.

Via: valueplays

Updated on

Previous article Jailbreaking Apple Devices Is A Booming Business
Next article Apple Inc. (AAPL) Is Best Bet To Make Wearable Technology “Cool”
Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a RealMoney.com contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.

No posts to display