Yet regulators are doing Australia a favour by taking a back seat, says Lex. “Inaction has forced lenders to step up or left funds themselves to sort out balance sheets. Banks are working with previous casualties such as Centro Properties and Allco Finance to restructure debt terms.”
But Babcock & Brown is a bigger problem. It has more debt, perhaps A$50bn. Its case is trickier. Banks have been brought on board and some extensions arranged. But there are doubts over whether it can continue to generate the deal fees that were a big part of its business. Fees from recycling assets and managing funds, linked to deal flow, will dwindle. That was always a risk with the model. There is no case for a bailout. . ft.com
CNP Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
