However, the income that is generated is ot sufficient.
That is why they rely on the revaluation of the assets and simply pay out income from capital.
What you also must remember is that you dont value the business on the past but on the future.
BNB will struggle over the next 12 months. To begin with, markets are not the best for investment banks, and with rising global rates, this reduces the valuation of infrastructure assets.
In addition, BNB are now not in a position to grow and so the revenue attributable to drawing acquisition fees is basically gone. I wonder how much revenue was generated directly from simply managing the assets only. This may be their only real revenue and will fall if this is based upon valuation. In addition, BNB will be most likely selliing off assets to keep the lenders satisfied, and will need to further write down their own holdings in their satellites given the fall in NAV.
Capital wise, they are handcuffed, particulalry after bailing out BBP and buying back that other vehicle last year (name escapes me).
And finally, credibility/reputation is the only thing an investment bank needs. They no longer have it.
Everyone tried to convince themselves about AFG as well.
If you are a holder, why punt on something you cannot control. I suggest you consider switching into one of many other blue chip stocks that have fallen 50/60% ver the past 6 months, but have a more certain future.
There are plenty of options in this market. Holding out on BNB may be the riskiest strategy of all with the potential of losing far more. You will not see $10 again. Possibly $7 or $8. Only hope is for a management buyout and that may give you $10.
BNB
babcock & brown limited
