article in afr, page-4

Just to clarify, not paying a distribution and the inability to fund capital works through debt refers ONLY to MCS36. This was included in the MCS36 release on the Centro website.

AFR 23/7/08, p57:
"Mr Condon said the syndicate [MCS36], which owns 30 centres on America's eastern seaboard, was now making monthly principal loan repayments to cut the debt. The tightening credit markets and cost of borrowing meant the syndicate [MCS36] would no longer be able to fund capital works through debt and would instead have to tap operational cash flow and reinvest in properties using operational profit."
(Ends)

As the article says, the reason this has come about is because the property values have decreased and thus the gearing ratio has increased. Mr Condon says that the gearing was "higher than is desirable" but still within the loan covenants, hence the need to start repaying some of the principal.

In fact, the entire article was about Centro syndicates, with another couple getting a mention along the way. The article did not refer directly to CNP, although we may be able to use the details on US property write-downs to get a feel for what the impact to CNP and CER may be.