"So when aussie $ gets higher it costs more us $ to buy than...

"So when aussie $ gets higher it costs more us $ to buy than before. The aussie $ went above the us $ during this period. They budgeted @ .93 Aussie to US but went as high as say 1.05 Aussie to US"

moremoney,

I am still at a loss here. For, the momey will have to be paid back in $AUD converted in $USD. And when the $AUD is higher than the $USD it would cost less $AUD to repay back by having to buy $USD at a chepar rate.

Take for instance when Keating was in power and where the "recession that we had to have" came in with subsequent devaluation of our dollar. Whitlam before this recession and before Keating came to power, devalued the $AUD dollar in a big way and many people got caught with their pants down. I should know as I was overseas at the time and realised that the money I took with me wasn't worth much at all anymore, and even many Banks didn't want to have a barr of it because they didn't know what it was going to do from one day to the next. I even had to get a job over there for a short period of time, until I got some English Pounds sent over, lol.

Now, Companies that borrowed in $USD at the time nearly went belly up, and some of them did went belly up because all of a sudden they have found themselves that their borrowings/debts was immediately multiplied by the dropped value of our currency. I know some that did. NO, not me, but some clients of one of my acquaintances.

Now, If you are to borrow say $200million dollars in $USD at the rate of .93 cents $AUD per dollar, you would have received a little more than $215 millions $AUD to spend as you wish here in Australia. And if you are to pay back those 200 million $USD back at the rate of $1.05 you would only have to pay back the $USD debt with a little more than $190,476,190 $AUD dollars. It means that you are in front of close to $25 million $AUD dollars by having to pay back with less $AUD's.

I don't know how the loan has been structured by the company, but if it was done in a different way, whoever allow that to happen should be hang by the proverbials and left out to dry lol.

On the other hand, if the loan has not been consumed as yet and supplied as needed, then yes, GBG will be receiving less $AUD's than they expected. But if it was me, I would scrap and restructure that loan altogether to cater for the current market sentiment. Again, the CFO of the company that handled that part should have made sure that all the money of the loan was received at the time and earning interests, and not as needed. That is what he/she is paid for. To do the best for the company, and not taking risks. If I was the CFO at the time, I would have done so, while making sure that I wasn't left out to the bounces and the mercy of the Forex. Big gamble if you ask me, while gambling with shareholders money.

I stand for correction if I am proven to be wrong though.

Cheers,
Buddy134