afr article

This article has got me really, really scared.

What if the CBA pulls out? CBA were said to be a hold-out at the last debt extension earlier in the year... or was it WestLB.. well, someone held out. No, it was CBA. Wait, the SMH said WestLB. Or did they? We never had it confirmed. I mean it was confirmed that the paper said it, but it was never confirmed that the bank held out.

Someone definitely held out; they must have.

It is customary in all debt renegotiations for beleaguered teetering-on-the-edge high profile victims of the credit crunch (like MFS, AFG, ABS and BNB) to have at least one party hold out. Even if nobody holds out, someone always does - if you get my meaning.

I reckon it was WestLB, because we know they held out on Babcock for either $70m, $100m or $200m depending on which paper you read. Actually, no it was Hypo bank. Oh well, they're all Germans so who cares? The Germans held out, which is typical.

Germans don't have money in their country (Germanland) which means they don't have shopping centres, which means they don't get what is happening to Centro.

Things are different in Europe. People speak funny too.

If the Germans are holding out, they don't understand shopping centres and Centro are teetering on the edge, the company will definitely go into administration. This means long-suffering, mum and dad shareholders and self-funded retirees who are unwitting high profile victims of the credit crunch will lose everything. Judge Finkelstein will also lose everything.. no wait, he already sold, which means he must have known something. Bloody judges.

No, it was CBA, because Sir Rod Eddington (the Chairman on JP Morgan) called Ralph Norris (the CEO of CBA) and begged him to extend the Centro loan.... according to the SMH. Or was it the AFR? Can you imagine Sir Rod begging? Me neither. Maybe he asked nicely.. maybe he didn't even make the call.

What scares me more is if CBA didn't attend the NY meeting it means they are definitely not going to extend. I mean why bother attending if you aren't going to not refuse to extend the loan? One explanation (which is just plain stupid) is that they are going to extend and failed to see the point of sending a couple of bank execs on a junket to the Big Apple, thus saving some much needed cash. Why would the CBA want to save cash?

Sir Rod Eddington is due to take over as chairman of ANZ soon.

Why would Rod Eddington, who did or didn't plead with CBA to extend, now plead or not plead again or not play the 'I'm going to be chairman of ANZ soon so we're all in this together' card to get them to extend?

Sir Rod Eddington is from Perth, which in itself is suspect because Alan Bond was from Perth too. Sir Rod also has a doctorate in philosophy from Oxford which means he thinks a lot but knows nothing. He is a director of News Corp (their share price has dropped which means someone knows something), Allco (they were a high profile victim of the credit crunch), JP Morgan (who are teetering) and Rio Tinto (who are a debt bomb about to explode.. according to Fairfax. RIO share price has dropped too which means somebody knows something).

I'm even more scared now.

Why won't Centro say something?

Oh wait, they did at the AGM. But that was a week ago... it must now be out of date.

The company said that no bank had said they wouldn't extend. They also said that lenders are becoming increasingly more comfortable with the situation. Glenn even cracked a joke. But that was a week ago and the SP has dropped which means somebody knows something, which reinforces the fact that the company is definitely going into administration unless the hold-out stops holding out.

But now we read in the AFR that all fingers point to CBA. Was Centro lying at the AGM? We know for a fact that the AFR article must be true. In Australia, no paper is allowed to publish anything without checking the facts, it's simply against the law.

So, if the CBA are definitely not going to extend and the company was obviously lying, this would explain the share price drop last week. I knew someone knew something. Why else would the SP drop? This is pure manipulation. Bloody short sellers, bloody Germans, bloody judges, bloody Perth businessmen.

But, if we do get the debt extension, for, say 2-3 years, then what?

The media will do hours and hours of in-depth research and probably uncover the fact that this is really only a 'lifeline' or 'stay of execution'. Surely the company will still be a high-profile beleaguered teetering-on-the-edge victim of the worst financial crisis since 1604 and thus could go into administration at any point?

The extension means nothing, it's just delaying the inevitable. Centro is definitely going bust. The market is always right.

Michael West was right too, "She's a gonna."

I can see it now:

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"Banks throw Centro a lifeline", 16/12/08
Struggling shopping centre owner Centro Properties has been given a [insert duration] lifeline by its lenders to allow for a forced sale of assets in a desperate attempt to avoid administration. Despite teetering on the edge for 12 months, industry sources (who preferred not to be named in case they are ridiculed by co-workers) indicated that the company is unlikely to survive.

One banker close to the action said, "They made it through 2008 but 2009 will be a lot tougher or it may not. If they don't go bust in 2009, it'll be 2010 for sure. Making it through 2010 will be a miracle, which means she'll collapse in 2011. This global credit crisis will probably last 15-20 years, so one thing is for sure, Centro will definitely go under or it may not."
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Well, I don't know about you, but I'm scared to death.

I'm just going to have to buy the AFR every day next week to see if there is an update to the story. It'll be $15 well spent... if you are as scared as me, you should all do the same.

Hopefully Michael West will have an opinion so I better buy my local Fairfax rag too... another $15 or so well spent.

If we do get an extension and the well informed media tell us that it's really only a short-term lifeline and the company is still likely to go into administration, I'll just take out the $270 1-year AFR subscription to be sure I am across all future developments.

..that way I won't have to be scared any more.