nxs debt going cheap, page-3

markvl

You will find that you get banks wanting to exit Australia totally or reduce exposures to particular segments and selling exposures is one way of doing that. For larger corporates, it is more common for the banks to execute credit default swaps where they want to reduce exposure - there are fairly liquid markets for the like of BHP, RIO etc.

Given recent problems with NXS execution, low capital level and development risk, I think NXS would find it hard to raise new funding in the current market, full stop. If they did get funding, you would be looking at junk bond status and high interest margins. 50% is quite low for face value, but this could reflect long dated and locked in small credit margins, lack of demand for the debt, current crappy market or a distressed/desperate seller.