What I don't understand is before the credit crisis cNP had a 70% loan to valuation ratio - high yes however manageable in pre-credit crisis times. Let's say for example in the future say 2 years the market returns to the property levels of mid-2007 levels + pays off debt ongoing through its annual income stream + pays off debt faster through sales of some its shopping complexes and let's even say beyond that property markets strength in the years after - how then will lenders be able to own 90% Centro in 7 years? It doesn't make sense - only if Centro struggle to pay off debt through a significant unexpected worsening of income streams and inability to sell off properties.
I'd love some of those here who continue to push the line like it is a given that lenders will own 90% on day, some even implying they do now (Buffett) - it comes across as alarmist and scaremongering.
I am happy for a reasoned explanations to set me straight.
Let's start with you Buffett? Or anyone?
CNP Price at posting:
8.6¢ Sentiment: None Disclosure: Held
