So we can expect a price lower than the 'theoretical' $11.96?...

So we can expect a price lower than the 'theoretical' $11.96?

@Paull198585

I don’t see the TERP as being a relevant benchmark, in this instance, because the set of fundamentals (i.e. the determinant factors of future revenue) has changed, since the Entitlement Offer was announced:

1) The Citylink concession has been extended to 2045, which is value-accretive and was not a given.
2) The toll escalation rule for the Citylink+WGT has changed (from plain CPI to +4.25% pa between 2019 and 2029), which is also value-accretive at the prevailing level of long-term break-even inflation.
3) Today’s announcement regarding the Fredericksburg Extension Project being approved is value-accretive too.

You have a point in that higher long-term real yields do entail a lower PV of the cash flows from all existing concessions (hence a lower fair value for TCL’s securities), everything else being the same.

But, in this case, you wouldn’t be comparing apples with apples because the details of the underlying concessions have indeed changed, and therefore "everything else" is not the same anymore.