don't get too excited on the reducing interest rates. It will...

don't get too excited on the reducing interest rates. It will not make any difference to earnings in 2009, in fact ironically, if there are further asset sales and debt repayment, the reduction in rates may in fact reduce the 2009 earnings! This is because the company has entered into interest rates swaps for its debt with more than $2b fixed for in excess of 5 years, and further $2B for maturities between 1-5 years. Thus if the interest rates fall below the swaps then there will be a penalty payment to make in cancelling the swap whilst repaying the debt. I know we just can't win.

however in the longer term the reduced interest rates will help, and in the short term lower rates will help to support, if not increase, asset values.

On the 2009 distribution, I have all but accepted there will be none. The real issue currently is gearing and the order of adressing this will be
1. asset sales
2. no distribution
3. raise new equity.

gGiven where equity prices are at we are better off without a divi than to be diluted at these low share prices.

I know this all sounds a little glum but I am still buying and I believe that on a 3 year view this will prove to be one of 2008's best buys.