This is from Huntley of E-trade.They have changed from "high...

This is from Huntley of E-trade.
They have changed from "high risk buy" to "Speculative buy"
Recommendation: Speculative Buy

GMG is a stapled security comprising a unit in the trust and a share in the management company. GMG has three inter-linked businesses - ownership, development and management. Each is based on industrial, warehouse and business park property, with assets in Australia, New Zealand, Europe and Asia. GMG is an active recycler of capital, developing buildings for its ownership or management, generating fees at each stage of the recycling process. Earnings are well-grounded in relatively safe, annuity-style, steady growth revenue from investment property and funds management. GMG should only be considered by income investors willing to bear high capital risk in the medium-term.

Event28-May-2009
Still no announcement of further new funding, following the recent provision of a $300m debt facility by Macquarie Bank. Standard and Poor’s places GMG on credit watch with negative implications.

Business Impact: Long term debt problem remains. Refinancing risk increasing as time passes.

Forecast Impact: --

Recommendation Impact: Recommendation downgraded from HIGH RISK BUY to SPECULATIVE BUY.

Event Analysis
It is now over a week since GMG announced the proposal for Macquarie Bank to provide a $300m debt facility with the right to receive 414m options over GMG securities at an exercise price of 30c with a two year term. The refinancing was $160m short of the amount originally announced, with GMG stating that it continued to be in discussions with other ‘strategic investors’ who may participate on the same basis as Macquarie Bank. Over the last week, no further announcement of new funding has been made by GMG and market sentiment towards GMG has deteriorated sharply, rendering refinancing increasingly challenging. Further, Standard and Poor’s have announced that they have placed GMG on credit watch, with negative implications for their BBB rating, reflecting long term funding pressures. The combination of delayed announcements by GMG and a deteriorating credit opinion by Standard and Poor’s combine to significantly increase refinancing risk. Accordingly, we downgrade our recommendation from HIGH RISK BUY to SPECULATIVE BUY.