Despit the loss of confidence it should be remembered that the two outstanding CMBS issues for Centro are first registered mortgages over a good pool of assets (with excess subordination I believe). The income stream attached to those securities is sound, so its not as though all of Centro will collapse from this. Admitedly the $1.3b primary debt and $1.4b JV debt will need to be refinanced in early 2008 (at higher margins) but this will only dent the P&L not the capital account.
Conclusion: no this isn't RAMS (although I think they will find their way out of the woods in January when their refinancing comes up). On the contrary, the FRM status of Centro is better than RAMS, and the income stream is not affected by increasing default rates (as is RAMS).
Kit
CNP Price at posting:
0.0¢ Sentiment: Hold Disclosure: Not Held
