Whilst the dividend yield looks good there are several assumptions involved in actually getting it.
Firstly, the breach of the lending covenants allows the banks to review BNB and potentially reduce/remove dividend payments in lieu of them being payed.
Past performance of BNB is no future guide to earnings - the satellite funds are struggling and BNB will have taken a severe blow to its credibility through all this. All of which suggests earnings may fall.
They may well have to write down the book value of the satellite funds.
Borrowing costs will rise with the reduction in their credit rating (see note posted this am by BNB)
So, the dividends *might* be a great deal.
As regards the Rolling stock purchase - it was out of a satellite. The deal was likely negotiated long before BNB had its most recent melt down. BNB also has to keep this sort of deal turning over as it is how they derive their fees
J.
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