I feel positive about the outcome, but as I have said before, the question is what will be left over for shareholders. That is what you need to think about as it will determine the ultimate value of your holding. I continue to feel better about CER than CNP but that is a reflection on our risk appetite too and could change quickly based on the disclosures we get from the company.
If there is a D2E swap on favourable terms or simply a 1, 2 or 3 year extension without unreasonable rate increases, it'll be good news (the longer the better of course). The issue is what's left over for us.
Remember though that Centro have been working on this for a full 12 months. Whilst I appreciate the global environment has deteriorated in this time, it's not like the company woke up a few days ago and realised they needed to do something.
Centro leadership and all of the lenders have met regularly over this time. As the company said, the lenders have become increasingly comfortable with the situation.
Arguably Centro is much further down the workout curve than any of its debt-laden, teetering-on-the-end, high profile victims of the credit crisis peers. I view this as a huge positive.
I would want to own a different company that 'does a Centro' in the next few months as I suspect the outcome could be very different.
CNP Price at posting:
7.5¢ Sentiment: Buy Disclosure: Held
