Once the properties are sold, debt can be reduced - the voluem of which depends upon the structures the banks have in place. If it is just commercial mortgages then they will get circa up to 70% (depending uppon the loan to value ratios (LVR's)) of each sale back. If they had mezzanine funds in place this could extend up to 85% of debt.
the debt to equity ratio will be redcued, some increase in cash will be seen (the balance of cash from the sales) BUT the ongoing profitability will be redcued becasue sale the sale of assets - like selling the jewllery to pay off your credit card bill - good for the bankers but not good for profitability necessarily - but the sentiment is about de-risking this share....so on balance should be good
Just my response plaease DYOR
CNP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
