michaelirish update please, page-4

welcome back michaelirish!

I agree with most of the points except (5).

"interest rates. It had very little to do the fall in SP"

hedging for the short term is fine as it covers the interest payments in the early years. However the average life of MIG's assets are well over 60 yrs. In theory, the long term tolling revenue can be increased with cpi, but it dampens the traffic flow. An example is M6Toll where increase in tolls and high petrol prices have seen a fall in traffic. That's why some analysts are saying that refinancing of M6Toll may be lower than expected.

Interest rate is one of the main factors in the slide in MIG's SP because the NAV and NPV of the cashflows are lower as you have to use a higher discount rate.

NAV gives an indication of the value of the tollroads. SRG was offered at a discount to its NAV. MIG's SP is currently about 26% disount to its NAV.

Steve Allen has stated that the macroeconomic factor(high bond yield) is dominant in the fortunes of MIG-less focus on the long, stable increasing income of the toll roads. So , if investors think that US interest rates will keep on rising, there is no doubt that SP can fall below $2.00.

the good news is that US is probably close to a pause in its interest rate (another 25bps is 40/60 in August).

Since I have limited resources and don't own a casino(also long term investor), I have reduced capacity to accumulate the shares. If I accumulate more, I will have a disproportionate allocation of my portfolio in MIG.

August will be the turning point in MIG's life. If MIG does not announce a reduction in the base mgt fee to MBL(50%) in its capital review, the hedge funds and US fund managers will oust MBL as manager - $ 2BN worth of pv of fees. Compare this fee v Market value of MIG.