beppa in 2012, page-50

Hi,

There has been various commentary about European banks and BBI debt. We should put this in perspective, consider the following:

a) Banks are in the business of lending and so long as the credit risk is of suitable quality then they will do so. It is the high risk entities that may have funding problems.

b) Whilst BBI is an entity domiciled in Australia, BBI assets are multi jurisdictional, eg the Ports asset. To even consider a UK bank would not provide funding (subject to meeting credit criteria etc) to indirectly fund a Uk asset would be cutting off its nose despite its face.

c) Infrastructure assets are highly capital intensive and normally strategic in nature. Sovereign governments will want to exercise a degree of control over these and, in addition to price regulation, what better way to exercise such control than by providing funding secured by the local assets. You only need to look at the repercussions in Europe of the Russians turning off the gas supplies, many countries are actively considering switching to nuclear power. (The EU allows mothballed stations to be fired up for startegic purposes).

d) Personally I would prefer if BBI was funded by Australian banks as the Australian model has proved to be one of the strongest in the world. We can thank APRA for this.

So there are two sides to the funding question.
Cheers