Hi ALL,Those who remember me, I predicted that BNB will test...

Hi ALL,

Those who remember me, I predicted that BNB will test it's lows before it sky rockets (some claimed it won't drop below $1 - sorry but it has dropped below $1 yet again).

I still believe it will test its lows before bouncing.

BNB is in a bit (ok a bit more than a bit) of a debt crisis, but so is more than 50% of the companies listed on ASX and other indices. The question is how are they managing their debt issues.

AFG went broke, because it had a very different structure and its assets were not quality assets. Also, AFG only had most of its debt with 4-5 banks.

BNB owed $2.50Billion to a total of 27 banks. Which means no one bank has major hangover with BNB. Also the banking syndicate removed the condition of market Cap of $2.5 billion back in June. The major lenders are losing their patience with many of their customers, but they have consider very carefully who they will support through such a time and whom they will just place a VA on.

BNB board seem to be very pro-active and are in talks with the Syndicate very frequently.

People are dumping their shares today, because when they hear BNB needing to use its credit facility to avoid breaching its debt covenants they fear the worse may be around the corner (which may be). However, most shareholders dont have the stomach to watch their money lose value very quickly.

I believe November will be a bloodbath and if (hopefully will) BNB comes out of November above the water it will be a turn around for the 2009FY.

November may well be the month that the ASX tests the 3,500 lows before it bounces back.

THE ABS result today and in the coming days will be important as well.

Those who are selling today, are those who are willing take in their losses and cut potential future losses.

I have done very in depth research on the Babcock & Brown Group, it's a quality group. Two things however really will decide whether BNB will make those shareholders who bought shares at $1-$2 lots of profit or massive losses:

- Directors deciding they no longer are willing to accept the legal implications of deterioting circumstances (AFG an example) and thus will decale a VA (Voluntary Admin)
- Banks decide it for them

So if the directors and the banks can haning in there and ride out the storm then shareholders like myself will be a very a happy bunch.

HIGH RISK - HIGH RETURN/LOSS

Good luck all