huntley's report - fair value 0.25, page-5

Sydney, just a guess here...

But it's not in the banks interest to have customers defult in the current circumstances. Yes they could jack up the prices but ultimately if values have fallen that much to the point when debt cancels out all equity, what are the banks going to do if the debt is already non recourse???

a fire sale and recover a fraction, and in the process further destabilise the property markets as this will set of a chain reaction as most REIT's over their are teetering on the edge already.

Ultimately it's the Banks that will suffer.

Alternatively, work with these companies, In Valads case the risk was centred around covenant breaches. Remove that and you have a workable situation. Keep in mind that Valad already has a highly respected platform in which to manage such assets. Further the BoS more than likely has another client on it's balance sheets in a similar predicament to Valad, only it probably has no vehicle in which to park and manage these assets! so the JV with Valad with it's expertise now looks attractive.

Does any body remember reading an article a couple of weeks back about EU banks looking at doing some JV's in order to manage toxic assets, Myself and another person on hotcopper (who i don't remember sorry) commented how Valad would be a prime candidate for such a venture, and look what we have today.

It's possible, if it all starts to go well this could form a model for the banks and my also present further opportunities for toxic assets that need to be managed by someone..... More business..... more fees

Just my thoughts..... DYOR