institutional raising, page-5

I agree Peter.

Haven't read the report in full, but when a debt facility was put in place by the fund a couple of years back its primary purpose was to facilitate fund liquidity - especially as at least some time back they built the reputation of the fund on being able to make withdrawals essentially immediately.

Although they say that the gearing is low in their opinion, if my understanding is correct the reality is that any level of gearing of the fund is a function of not having the funds available to pay investors wishing to withdraw. The fact that they had draw the $240 mill facility down to $238.3 mill is not positive.

Also, the facility provider has clearly got cold feet given they are cancelling it.

Going by the dollar value of loans CIY states are due for repayment (ie. $326 mill by end March, a further $707 mill by end of calender year) it would appear they will be able to clear - albeit this would be expected as I assume the progressive cancellation was based on feedback from CIY of what was possible. It would have to, however restrict the volumes of new lending that can be taken on, even it it leaves them with enough funds for current commitments.

I think this is one reason why the fact the accounts are not audited is a concern. Would an auditor have forced commentary on the impact on the business of liquidity drying up? Or how does it place them in regards to financing commitments already in place? Maybe this was covered in the report and I missed it?

MJS