I hope you guys are right. On my analysis the mezzanine bonds are costing $1bn yen per annum in interest paid quaterly plus $0.5bn yen in interest capitalising annually. The convertable bonds and the foreign currency loan are capitalising a further combined $0.45bn yen in interest per annum. That's nearly $2bn per annum in interest which equates to roughly 50% of the funds current total net annual income. Add to that the $1.3bn yen in interest per annum for the senior bank loan and approximatley 80% of the funds annual net income is soaked up by interest on borrowings. Yes $1bn per annum of the interest is capitalising but it still costs.
The LVR of the combined debt to fund value is 80%. On this basis I wouldn't be counting on a refinance soon.
I'd feel much more confident if they were selling buildings now.
GJT Price at posting:
$1.55 Sentiment: None Disclosure: Held