fiig rates mxupa as exceptional value, page-15

Okay, so... 60% of you seem to think that they will be redeemed 1 April 2010, 40% don't... Seems a fair statement?

According to the balance sheet, I realllly can't see MXUPA having sufficient cash to pay these out, without someone like BAM contributing more equity.

There's no reason to assume that BAM will, again, contribute equity... given how much they have recently / massive investment in BBI / etc. By my reckoning, BAM would need to contribute >$300M to allow MXUPA to be bought back at facevalue.

Isn't Multiplex's current margin around 300-400 above BBSW? Won't the stepped up rate be 390 above? Within that range?

Let's presume Multiplex need this $450M in financing (otherwise, why would the market be rating them so riskily?)...

So, the $450M would be replaced with 300-400 above BBSW debt (more like 350-450, as would be a new debt issue, and would be losing this $450M of MXUPA from the Accounts)... but, at any rate, it wouldn't be materially different interest rate.

So, what benefit is there in purchasing MXUPA back??? They need the debt, they can't get materially cheaper financing (unless guranteed by BAM, which BAM seem reluctant to do)...

So, I believe MXUPA will pay the Stepped Up rate for the foreseeable future. 24 months from today?

Now, I just got to plug those numbers into my Calculator and see if I want to buy at just under $70 or not.

Finally, I don't understand this "reputation risk" if BAM or Multiplex does an on-market buy back?

A simple Announcment:
We believe the market is undervaluing our MXUPA, which have never missed an interest payment, and are paying a Running Yield of :... As such, we will buy back some MXUPA over the next 6 months.

The MXUPA price would go nuts on that news... and MXUPA still may be able to buy back $50M or so, and save themselves $20M? Seems like a worthwhile thing.

I don't understand the "reputation risk"? Is it really that frowned upon for companies to do this?