Lets look at some facts:Its only a few weeks ago that the banks...

Lets look at some facts:

Its only a few weeks ago that the banks agreed to the refinance of their debts and indeed increased their exposure. Yes there is debt but the debt is being serviced fully and all covenants are being met

Stage 1 of the credit crunch left BNB relatively untouched and maintaining its credibility - hence we have not (so far) had an AFG, MFS or CNP situation.

The recent capital raising was enabled and completed - again recently.

BNB are actually making money - and are clever financial engineers.

They do not have major exposure to the sub-prime sector (unlike Allco for example with its Mobius venture) and of course of course even the sturcture of mortgage debt is different here compared to the US - over there you hand the keys back the bank has the problem - mortgages are non-recourse - unlike over here - so lets compares apples with apples - whenever the US sneezes we catch a cold - everyone is tainted with the same apple sauce.

With the "review event" now upon us - how will the banks react ? if they approved and increased credit lines only matter of weeks ago - what has ACTUALLY changed - not much only credibility.

As Oscar Wilde said confidence is like virginity - you lose it only once. BNB has a credibility issue right now - the business model, whilst perhaps having flaws around the edges still actually makes money....good money (BNB's PE ratio is well under 4 now......its cheap on fundamentals.)

So how do they return credibility. In my view they get:

1) agreement from the banks that the review will not be formally made unless the share trades at below $2.5bn mc for a PROTRACTED period of time - say 22 consecutive days - ie a working month - lets be honest nothing has really changed about the business operationally just its perception in the marketplace, which will blow over.....

2) Secondly they confirm that dividends can be paid over a tangible target of EBITDA/NPAT with or without the review event having crystallised. Dividends are the mainstay of the instos' - and the communications from BNB have left doubt about what is happening there.

3) Sell the wind assets asap to bring about a reduction in debt.

BNB is GOOD on its fundamentals - if it wasn't the SP would have been hammered before and the banks would have refused the re-finance only a matter of weeks ago - so lets be pragmatic here - there is value within BNB - its a good company with good earnings and the capacity to meet its debt obligations. Undoubtedly the current debacle has damaged its ability to raise additional (cheap) equity, which will have an effect upon its growth ambitions this year - but lets be honest its in a catch-22 negative spiral - the SP's screwed (of both parent and satellites - but because of credibility not because of fundamentals), which reduces the equity within of the business, which restricts their ability to raise more equity - so its a negative spiral and the media and other "commentators" get on the negative bandwagon driving the creditbility further downwards.

All I say is look at the fundamentals and lets hope pragmatism prevails - this is a good fundamental business