Lakshmi...I held both CNP and CER stock, but I always lent...

Lakshmi...

I held both CNP and CER stock, but I always lent towards CER as being the superior investment, and as such my holdings were weighted far more in favour of CER. It was when I became aware of an impending debt of $1B owed by CER that my views changed considerably, and I came to the belief that CER's risk profile was greater than I was willing to accept. I had liquidated my CNP holdings much earlier, and I walked away with a small to moderate loss, most of which I managed to recoup trading in and out of CER.

Cottertop is obviously correct in saying that banks are not in the business of owning businesses, but I believe, as has been the case with CNP, and as is being attempted with BNB, banking syndicates WILL convert debt into equity, in an attempt to secure assets, with the intention to sell those assets in the future in more favourable economic conditions, and thereby limiting their losses.

I think that CER faces an enormous challenge in repaying this debt, one that I think they will ultimately fail, and in light of the current shareprice, I would dare to suggest that the market also sees it this way.


Coppertop, yes you are correct, the debt related to SuperLLC was rolled over, but I am of the belief that the $1.5B debt maturing 31Dec09 related to CMBS facilities, are of a different nature, are under different circumstances, and may prove to be more difficult a task to achieve a positive outcome.

All IMO only.