thx for the link guys. Preso explains a lot. Like Von I was...

thx for the link guys. Preso explains a lot.

Like Von I was impressed with their presentation and their committment to a reasonable process of action - if not forced into the position.

The CS warehouse facility has 364 days notice period and about 18 months + to run. They have indicated no undue pressure on this facility which is fixed at interest rates.

Given CRE prices estimated to fall between 5-10% over coming year the risks become present if

Most assets leased (94%) 84% to gov agencies - credit risk from recession therefore very low
NTA in excess of $1
FX hedge releasing >$34m cash
Sale of Riverview property exchanged - completing end March/early April - if completes - $20m extra in cashflow
Sensible asset disposals and early repayment of loans sought (at a small discount from some borrowers) only 1 incident of impaired debt currently
Focused on reducing s/t debt

projected dividend yield after planned strategy appx
9c!!!(greater than current SP - 112% return)

This pre-supposes it survives short -term.

Key risks as I see it :

* manager fails - ie Allco - what terms are within CRE loans that could affect loans - hence Babcock and Brown circling (even though Fell highlighted these were quarantined)
* notice given by Credit Suisse on warehouse facility - would force sale of assets on a disorderly basis.

So if s/t debt is being reduced - CS would be seeing a better risk profile and should be expected to therefore be viewing the position less onerously.

As Von says this could grow dramatically very quickly with good news coming out - and the plans unravelling as discussed in the preso.

At 8.3c currently if you believe the mgmt has the ability to execute their ideas (which on face value presents me with some comfort) against NTA of $1 this is a no brainer for potential high capital growth and yield from dividends BUT has some short-term potentailly high level risks around areas none of us can forsee - the credit markets.

For me as a part of my portfolio (but no more than 10%) - it is worth the risk - BUT I wouldn't put my house on it.....

Just my thoughts

DYOR








key risks as I see it