HHC arranged third-party debt and preferred and common equity commitments reducing HHC's cash investment in the project to $49 million.
Resolved true The record shows it happened or was so.
Factual: Statements about the present or the past, checked against the record: did they hold up?
The second judge would not resolve this claim; the verdict shown is the first judge's.
Said for an organisation they lead or work for; it counts on both records.
What would count as true or false
TRUE: an HHC filing, press release or Pershing Square letter shows that third-party debt plus preferred and common equity commitments for the project referred to in May 2018 reduced HHC's own cash investment to $49 million (±$1 million for rounding). MOSTLY TRUE: the financing structure is as described, but the figure is within ±10% of $49 million. MIXED: the financing structure is right, but the cash investment differs by 10–30%. MOSTLY FALSE: the cash investment differs by more than 30%, or not all three funding types (debt, preferred equity, common equity) are documented. FALSE: no third-party financing of this kind existed for the project.
Set before the research began.
Evidence (3)
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E1 Howard Hughes Holdings Inc. (HHH) Q1 FY2018 Earnings Call Transcript - May 2, 2018 roic.ai (transcript aggregator reproducing Howard Hughes Corporation's Q1 2018 earnings call) · 2 May 2018
“Our equity basis in the venture is $87 million comprised of $49 million of cash and $38 million implied equity based on the mark-to-market of our land.”
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E2 Howard Hughes Holdings Inc. (HHH) Q1 FY2018 Earnings Call Transcript - May 2, 2018 roic.ai (transcript aggregator reproducing Howard Hughes Corporation's Q1 2018 earnings call) · 2 May 2018
“We have a senior construction loan of $494 million in place and a preferred equity partner with a commitment of $170 million. Our co-developer Riverside Investment and Development will invest $9.7 million in cash equity.”
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E3 Howard Hughes Holdings Inc. (HHH) Q1 FY2018 Earnings Call Transcript - May 2, 2018 roic.ai (transcript aggregator reproducing Howard Hughes Corporation's Q1 2018 earnings call) · 2 May 2018
“Total project costs are $761 million and the project is expected to generate a 7.9% unlevered yield on cost.”
Reasoning
The May 2, 2018 HHC Q1 earnings call transcript describes a $494 million senior construction loan, a $170 million preferred equity commitment, and $9.7 million of cash equity from the co-developer Riverside Investment and Development (E2). It also gives HHC's equity basis as $87 million, made up of $49 million of cash and $38 million of implied land equity (E1). Together these figures add up to the stated total project cost of $761 million (E3). This matches the claimed $49 million cash investment exactly.
Cite this claim
Bill Ackman, “HHC arranged third-party debt and preferred and common equity commitments reducing HHC's cash investment in the project to $49 million.” (said 17 May 2018). Verdict: resolved true. Reliability API, claim c_89ead183a61a, method 0.1.0+c876030c, dataset release v1.1.2. https://epistacklabs.com/claims/c_89ead183a61a
This claim is in dataset release v1.1.2, with the same verdict.
Reply to this claim
More factual claims by Bill Ackman
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“We created it out of the bankruptcy of General Growth.”
Howard Hughes was created out of the bankruptcy of General Growth as a spinoff of its other assets.
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“2 years later, we emerged from Chapter 11.”
General Growth emerged from Chapter 11 two years after Pershing Square's investment.
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“The company’s got a 4 billion dollar market cap, and the goal is to build it into a trillion-dollar thing over time, compounding.”
Howard Hughes Holdings has a market capitalisation of about $4 billion.
Verdicts are made automatically; how verdicts are made.