In response to redphoenix post:
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Just off the topic for a moment Swap, but can i ask whether you're still in BBP ?. Just havent seen u post there for a while..
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Red,
Yes we are. I took a 'toe in the water' parcel last Thursday, spent a lot of time researching overnight and then bought some more on Friday. I am firmly of the opinion that this still remains a risk but:
1. I think the way the company handled this was a disgrace and the market punished them, but probably over did it.
2. They need to resolve the financing issues. Having B&B as a backstop is good psychologically but I doubt they will ever get called upon.
3. They have some good assets and are making sound investments in new assets. I do think they may have overstretched it somewhat though which may unfortunately (as the AFR today suggests) lead them to having to sell some.
4. I can only see increasing demand for their product.
5. The current divvy makes it attractive short-term and may act as a prop for the SP while the refinancing is being sorted out.
On the downside though, the way this was handled let to it being somewhat Centro-esque and this has caused reputational damage which may lead to continued short-term SP volatility.
They also have a lot of intangibles on the balance sheet, which always makes me very nervous. There is also the question as to whether the interest rates on any new debt will have a major impact on earnings moving forwards.
All in all, I think this is a good long-term investment but it's one that I'll watch very closely just in case.
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