amp increase their holding, page-3

AMP buying? Yeah, me too! What's all the fuss about? I just put this on the bnb thread. Perhaps it should have went here...

There is no shortfall. The new loan is the same as the old loan. It is only a matter of who they borrow the money from. BBP has decided to split the loan into asset backed and corporate to get cheaper interest rates. They expect the total average interest rate to be around 8% which they can easily afford.

The construction costs of the Tamar Valley power plant have always been there on the cards. There is no problem borrowing extra funds to pay for this and this could be easily be afforded from the revenue too. The only problem is by taking on more than 60% debt it might affect their credit rating and hence their finance costs.

This is not a question of company viability. It is only a matter of optimal financing. I agree the execs are hopeless at explaining things to the market. But the brokers and analysts essentially do understand the situation and that is what matters most to the sp. Not what the press says.