ann out, page-19

Rewind
AFG has a much more fundamental problem, told by the following figures

HISTORICAL FINANCIALS (via Comsec)

Balance date 6/02 6/03 6/04 6/05 6/06 6/07
Long term debt 114 -- 78 339 630 5,921 $M

From 6/06 to 6/07, long term debt blew out from $630M to $5,921M – hypergrowth.
The AFG management thought the financial party would just keep on going.

They were wrong.

This is pretty much the story across the AFG empire – Rubicons, RRT …

It is much more fundamental than just a single condition on a single loan.

Still, my feeling is that AFGHA is good risk/return. I’m thinking that the chances are pretty good of at least next 3 or 4 coupons being paid, and covering my entry cost, so relatively little down side, with huge upside. Of course, the market doesn’t agree with me or it wouldn’t be so cheap.

People just have to be prepared to wait a bit.

I recon, if/when the November coupon is paid, you and I should buy each other a drink.

(Holding AFGHA not AFG)