deal done , page-10

'Whether CBA is 90% secured or not is not relevant if we are in the middle of a credit freeze who could they sell CNP's assets to, to recover their money? They will take a bloodbath because they wouldn't get anywhere near fair value. Hence as I said they just can't afford to shut CNP down'

If CBA's loans to CNP is 90% secured, and I am not sure if they are, then they would easily recover their money. Let's say theoretically 50% of all loans to Centro are secured and Centro is geared say 75%, then Centro's assets could be sold for 37.5% of book value and Centro would get all their money back. Hey the secured lenders could sell CNP for 10% of book value and get a high proportion back.

So why don' CBA pull the plug? Well we may find out in December but the only realistic reason is the interest payments. The question is, does CBA feel it necessary to reduce their risk in Centro? CBA has generally fared the best out of the big banks in the credit crunch due to their stricter lending policy.