If these guys are right those that bought today will make a...

If these guys are right those that bought today will make a motza


1006 [Dow Jones] Babcock & Brown (BNB.AU) cut to Neutral from Buy at Merrill Lynch. Price target slashed to A$7.50 from A$24.00. Says factors driving market cap below A$2.5 billion yesterday don't necessarily reflect fundamentals, but triggering of review event for A$2.8 billion corporate debt facility a material risk. "Babcock's admission Thursday that the debt review event is cured only if its market cap is about A$2.5 billion four months hence rather than continuously throughout is a further blow to management's already fragile credibility following unexpected capital raising in March and stumble over the Babcock & Brown Power refinancing, which is still not a done deal." BNB down 22% at A$5.39. (DWR)

1018 [Dow Jones] Babcock & Brown (BNB.AU) down 21% at A$5.40, hits record low of A$4.70 on debt concerns after yesterday's break of A$2.5 billion market capitalization triggered four-month review of debt covenants by banks. Investors appear dismayed by BNB admission that debt review will only be prevented if it's above A$2.5 billion market cap in four-months time, rather than if it is above that level at any time in the four-month period, as it had previously lead market to believe. Merrill Lynch slashes its price target to A$7.50 from A$24.00 in another major blow, particularly since ML stated that yesterday's admission by BNB is a further blow to already fragile management credibilty. Senior institutional trader says funds likely bailing out of BNB. (DWR)

1044 [Dow Jones] STOCK CALL: Babcock & Brown (BNB.AU) downgraded to Neutral from Buy by UBS, with 12-month target price slashed to A$6.80 from A$25.00 vs BNB last down 24% at A$5.23. Says breach of review event on its debt facility has caused "crisis of confidence" and potentially puts it under significant influence of banks, leading broker to change valuation model from that of an ongoing business to attach target price of just 90% of its net tangible assets. Notes "significant upside" to BNB if banks allow it to continue trading and says "corporate action, such as a management buyout or breakup, cannot be ruled out." (WEL)