Citi was making a big point out of EQUITY LOCKUP. This would put the fear of God in investors when you look at what happened to CCT and is happening to LCT
ML comes out and says for EL to happen traffic needs to remain 133K. for the whole year.
There is no way this will happen.
Already there are signs of a 4-5% pickup in traffic
"Equity lock up still not at risk Despite the traffic drop off, the asset isn’t at risk of equity lock up, in our view. Lock up occurs at an interest cover of < 1.35x. But even after adopting lower FY09E traffic of 155K per day, and an average toll as per the first week, our ICR in FY09E is 1.51x. Traffic would have to average 132K for full FY09 to trigger lock up holding all else constant. Beyond FY09 the interest cover ratio remains above 1.7x on our numbers. We have seen 4-5% traffic growth this week For the past two weeks we have had our own traffic counters at two points along the road in the morning peak. Last week’s data indicated that traffic was off 30% in the 7am-9am morning peak versus untolled. Full week data came in at 50% below, indicating that while commuters are prepared to pay for the time savings, off-peak traffic has declined significantly. Interestingly, data collected this week is up 4-5% on the first week of tolling, suggesting some who left are coming back
CEU Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
