The question of ranking if the banks' charge is unwound is a...

The question of ranking if the banks' charge is unwound is a valid one.

The AFGHA prospectus says that the notes rank behind all other debts other than those that rank equally. The question is whether the bank debt would rank higher than the notes or equally with the notes if the charge was unwound. The assumption would seem to be that the bank debt does rank in seniority and the notice from AFG from a couple of weeks ago affirms that assumption.

However, a few bits and pieces that I have read suggests that subordination is not easily enforced and there may be valid arguments to suggest that the notes should rank equally.

I certainly would not bank on anything; this is a glimmer of hope only at the moment. I guess we will wait and see how things pan out.

And, as per the previous comment, expect the unexpected...