htran7528 has expressed the truth of the situation.
- We turn our BBSN subordinated notes into subordinated debt in BBIPL via the notes guarantee; and
- The debt becomes due and ultimately the noteholders become unsecured creditors in the administrative process.
I actually find the entire situation completely unsettling.
- Why go through the elaborate exercise of restructuring the senior debt;
- Why do they clearly back the BBSN holders into a corner and convince them they have nothing to lose - they have lost it all?
When the BBSN holders, as debtors in the asset rich vehicle, can simply pull the plug and send everything crashing down.
Larkin and the Banks are not stupid (greedy, yes).
I has me worried that there is some other resource:
- The Trust deed, in fact, is a "screwed scrum"
- There is some M&A cat in the bag to be announced after the noteholders have been fully tenderised.
There are a number of points of procedure that need to be clarified:
- Does BNB need to be pushed over before the BBIPL guarantee kicks in - or can BNB simply declare they cannot meet the obligation to enact the guarantee?
- What is the timing? Only the various trust deeds - some of which we haven't seen will be clear on this.
- Does the trustee act for the ex-noteholders once they become unsecured creditors in BBIPL?
Make no mistake - the company and the banks are not acting in noteholder interests (they have abandoned the equity holders - it is a small matter to abandon the BBSN holders in their collusion with banks).
Even the Trustee cannot be relied upon to be devoted to the BBSN noteholder cause. They can be a prime target for damages, in certain situations. They will act to protect their interest - minimising the costs of administering the trust deed. They will require some prodding to fully engage with noteholder interest. (I hope I proved wrong on this point - the Trustee is in the best position to sue for damages on behalf of the noteholders).
BBIPL has assets. The way forward, for noteholders is to PROVE damages - a court can rank these damages higher or equal to the bank senior debt.
If we do not fight .. we lose.
If we fight .. we CAN win.
BNB
babcock & brown limited
