current interest rates for cnp, page-9

Buffett,

The rates for all CNP facilities were disclosed as part of the half year results. The aggregate rate across all facilities is 7.36% exclusive of hedging. TBH, I am not sure if this is a weighted average but it could easily be worked out. It is difficult to assess the exact impact of hedging although there is some disclosure on this if you dig deep enough; something which I have not done.

The important thing here though is that the debts we are interested in are at a different rates.

If you look at the disclosure, and take all debt with note (7) next to it, this refers to the debt which constitutes the $2.3bn Australian lending group. This is at an average (unhedged) rate of 8.77%.

You will see the $1.3bn JV debt was obtained at 5.93%. Note (6).

Now there is a mistake on the document, which I highlighted to Centro at the time. All of the unsecured notes debt of US$450m, which is also flagged as note (6), is in fact not correct. It doesn't impact the interest rate, which is 6.19% unhedged. It does however indicate a different maturity date, but this has since been corrected. You will notice that something obviously went very, very wrong with the noteholders - they have maturities from 2012 to 2026 - so it must have been pretty serious for them to be involved in the refinancing negotiations. I have suspected for some time that there was a breach of covenant for these notes but Centro remained tight-lipped on this despite my probing. I guess we'll never know... unless GR writes that autobiography I mentioned yesterday.

We know from subsequent disclosures that the company incurred a 1.75% premium on rates from 17th December but nothing else through to Sep & Dec extensions. There was also talk of a 1% extension fee but I am unclear as to whether this is applied to the Aus, US or Notes debt or all three. Remember as well that it is amortized over the life of the extension, which I have assumed to be the new extension dates of Sep and Dec accordingly.

Hope this helps.