centro ann: refinancing 331m facility 6 june, page-15

Hi everyone,

Good to see you all working hard on the posting over this long weekend. Next time someone asks me “so what you got planned for this long weekend?” I'll have an idea of what to say.

Although the 331m amount may not be very significant in relation to the total outstanding short term debts, it still is significant to the extent that the lenders are starting to come around and show more confidence in Centro's long-term prospects. The fact that they have managed to transfer these loans from short term debt facilities to a roughly 2 year refinancing arrangements shows that the company should still be around until at least that time. If they’re around till that time, then this global credit crunch will be part of the annals of ancient history by then.

Every bit (or every brick) counts. Come Tuesday, market reaction to this should be positive and if it isn't, then I’m not sure how this market works anymore.

With some great analysis from Swap and Co on likely asset sales in Australia (later confirmed in news articles although we're not quite sure where they got that info from - perhaps from hotcopper itself -lol) and a big AFR article about the likely sale of the CAF, we can se now why the most recent debt extensions (15 Dec) are subject to the creditors agreeing on the distribution of assets once they've been sold.

The banks are aware that these sales are either complete or close to completion. The 331m refinancing arrangement would never have been put in place if these creditors didn't have confidence in Centro's ability to ride the Sub Prime storm. And lets all face it they have ridden this storm in the face of very big obstacles (mainly bad media).

They have a long way to go but that's only because they're not going to go away that easy. This company is no Allco Finance or Octavia. This company has tangible assets and very good ones at that. The prices that are on offer right now are absolutely ridiculous (i.e. very very low). Sure there's risk but these risks are reduced by the assets they have under management. If the banks foolishly put Centro in adm rec (very unlikely and this would have already happened if it was ever going to happen), they know that this company will lose another major asset in the form of its expertise in managing the shopping centers which generate Centro's substantive management fee income (separate to rental income).

And there’s my two cents worth.

P.S. Happy birthday to all the monarchists out there. Coming from a republican that was hard but it’s great to get the long weekend any way.