centros guillotine to drop, page-17

Mack67 you have no idea.


Companies do not borrow at cash rates. The borrow at spreads.
I.e. their cost of debt can be described as LIBOR + spread.

LPTs six months ago borrowed at around LIBOR + 100bp (the spread). Today that spread has risen to 900bp! Hence with Centro rated around the BB or BBB level their cost of debt is around 14% (Libor of 5% and spread of 9%).

Have a look at www.markit.com. Go to indices and the have a look at CMBX. Centro is rated around the BBB and BB level.


Please do a little research first.