This is where the problem lies for Centro. There are one or two banks that have the majority of their loans secured and others that are totally unsecured. Unfortunately no matter how well intentioned these unsecured banks are, it only takes on of the secured banks to jump ship and the rest is history for Centro.
I do not believe that banks will lose everything however should the card be played. The assets are still worth something and I wouldn't put it past banks doing a deal with other property managers (eg your Westfield) to take over the management rights or organise a fire sale.
The bottom line is if Centro go down, some banks will get most of their money back as the are secured, and this fact would be very enticing for them to pull the plug.
The situation is very precarious. Which way it goes is simple in the end. CNP have to reduce their debt to equity ratio to satisfy the banks. Otherwise they're history.
CNP Price at posting:
7.5¢ Sentiment: None Disclosure: Not Held
