cnp syndicates gearing ratio misleading

CNP syndicates gearing ratio misleading.

On 24/12/2008 CNP announced its MCS syndicates NAB values and said that their debt gearing ratios were all under 62%.

This is quite misleading.

This is because 50% of the equities of these syndicates are from CNP trusts, and in turn 50% of the equities of these trusts are from CNP itself. All these trusts and CNP itself are all highly geared at ~60%.

So the real gearing ratios of those syndicates are far higher than what they said.

This is why all the banks have refused to refinance them now and CNP has to fire-sell its assets.