There are several methods to value:Replacement costEconomic...

There are several methods to value:

Replacement cost
Economic value
Market value (for similar recent sale of same asset class, same geo)
FCF basis
NPV

etc.

They value using each of the methods, then take the lowest one. This is so that noone can sue them later for inflating asset prices.

The problem is that currently the prices are falling -- so even if they value very conservatively by the time they sell em they might be higher or lower.

BNB's real-estate and non-core portfolio is indeed horrid. They have 4B of crab on their books basically.

The only good stuff is the PPP (Public Private Partnerships) and leasing assets as well as their high margin advisory services.

-So PPP will probably sell assets for good prices,
-leasing assets although very good currently carry very depressed prices (due to AIG collapse -- putting on the market the second biggest aircraft leasing business on the market worth $7B),
and that leaves us with the advisory unit which day by day is canceling their contracts with the satellites... and not much else.

so my argument is that the banks are essentially carrying out an administration, only with the board in charge of the admin. Hence they will not be stupid and hand cash over to bondholders let alone share holders. They just want as much as they can get. That is why they've made provisions against their BNB exposure -- if they expected anything else they wouldn't have.

Just hard to be stay optimistic about any of this.