Hi Watford,Long time no speak, hope you are dodging the bullets....

Hi Watford,

Long time no speak, hope you are dodging the bullets. The word "bullish" and ALZ seems an oxymoron. Perhaps this capital raising is less bearish for ALZ..lol

Good news for the Capitaland stable no question. They are struggling like all REITs and developers but they have been conservative with liquidity for some time now. Sold a lot of stuff 07/08 before the crunch really hit and had $4B cash end of sep 08 quarter. Of course lots of cash going out as sales stall but this capital raising shows they are prepared to keep topping up liquidity as required. Don't follow them that closely but thinking that this cap raising will see Capitamall and the rest of the stable in business as the sqeeze tightens.

My FA always relied on Temasek (one of the biggest soveriegn funds and biggest shareholder for Capitaland) supporting Capitaland with equity as required and thus Capitaland supporting ALZ as required being 60% their baby. They will let ALZ go down to the wire including cheap asset sales because they are strapped and already tipped in $300M but ultimately IMO ALZ will be kept from the banks by the strength of Tamesek and equity they already have tied up. Every capital raising increases the worth and investment of ALZ and Capitaland to Tamesek which in turn decreases the chance oif them walking away.

ALZ have some really good things in their favour.

No management company raking off fees, all goes to shareholders. ie IIF, IOF, MOF, GJT, BJT etc etc are all run by "men in black" for many millions in fees each year. The interest of shareholders are not aligned with managers who will never return value to shareholders at the expense of their fee stream.

Only Aussie assets so no exposure to chronic UK, US, Jap and other markets. No "other currency" debt blowing out gearing ratios and covenents as AUD slumped.

Develpoment committment already cut right back compared to the likes of Multiplex etc who still have large office towers etc to fund and complete.

Ability to keep selling some retail lots to 1st homeowners etc to recycle assets into balance sheet liquidity.

Long Lease and young investment portfolio of good quality.

Already raised $450M which has kept gearing down as committed developments come onto balance sheet.

Capitaland as 60% owners have good international reputation that I assume they are very keen to preserve by not seeing ALZ, shareholders or it's creditors, take it up the date.

Unfortunately, ALZ found themselves with very short dated debt to rollover, including a very large amount of CMBS debt which is 100% closed. Until that gets sorted they are going nowhere and that wont happen until post March. My chats with company indicate that the business has enough liquidity to pay out the CMBS and some other June 2009 debt but very tight. Would then need to roll over 100% of 2010 syndicated debt and come up with $300M in 2011.

I hope they get their $350M additional finance 2nd quarter obviously but ultimately they need to sell their way into liquidity by 2011. Damn banks are unconscionably ruthless in extracting massive "rollover fees" and loan shark like interest rates once you breach a loan covenent these days it is bloody hard to your head back above water.

Hopefully some of the Capitaland raising is for divi reinvestment plan but they gave it the miss in Dec and I suggest it was becasue they are feeling the pinch in Asia. Geez as a AAZPB holder I would like to see one more rights issue put them out of reach of the banks once and for all. Not coinfident that will happen but heres hoping.

Spaeking of AAZPB I have been encouraged by the volume of support at $33-$35 last few days in the face of dtermined selling. Perhaps this is the bottom from whence the distressed and stale can get out and see it heading in the other direction. Didn't pick interest rates going to near zero last Aug when I loaded up so that fatal flaw has seen them rightly downgraded with all the other floating rate securities (too busy focussing on strategic and balance sheeet risk rather than the obvious ewarnings driver..doh).

cheers