superllc presents great upside for cer, page-4

Hi all

Ive actually put together a SuperLLC variance analysis spreadsheet which looks at the following:


- Comparison of debt of all Super LLC debt facilities from June 2008 to December 2008 to June 2009

- Comparison of cost of debt of all Super LLC debt facilities from June 2008 to December 2008 to June 2009

- Comparison of total interest expense of all Super debt facilities from June 2008 to December 2008 to June 2009


I have noted that the total interest expense of Super debt facilities on a "look forward" basis was US$112.37 as at June 2008 vs US$84.15 as at June 2009

Total debt however as at 30 June 2008 was US$1.924b which was actually lower than the Super debt total as at 30 June 2009 which was $1,943b.

The reason for the increase in debt (as I have noted in my spreadsheet) is that new debt facilities were issued to SuperLLC as part of the stabilisation agreement at the start of the year and the lower interest expense is attributed to the lower cost of debt primarily due to dramatic drops in the LIBOR rate in the past year. Much of the variable debt has been tied to LIBOR as the benchmark.

The hedge rate of US debt as at 30 june 2008 was 5.6% and was hedged at 98%. (pg 29, Aug 08 presentation)

The hedge rate of US debt as at 30 June 2009 was 5.01% and was hedged at 88% (pg 16, Aug 09 presentation)

The lower hedge rate and the underhedged position as at 30 june 2009 will ensure that CER will enjoy some of the interest expense savings on a 'look forward basis'.

This should offset much of the likely drop in NOI in the next year. Page 11 of the presentation shows that CER's NOI in Super LLC was approx US$210m for FY09.

Even if this were to drop around 5% to US$200m for FY10, there should be little change in the net profit figure of approx US$65m that was generated in FY09 for FY10.

As mentioned in my first post on this thread, although Super is not showing up on CER's books, it still is a monster hibernating that will be of significant value to CER once it awakes. Please refer to my previous posts on SuperLLC on this thread.

If you would like a copy of my Super LLC spreadsheet, please do not hesitate to give me your email address and I will forward it to you.

Cheers

P.S. If anyone out there can help me get a job, that would be greatly appreciated! I've been unemployed for the last month and would gladly appreciate any help :-( I'm actually being serious!

Cheers again