Hi Mike,
I'm inclined to agree. Certainly the BB facility (in one form or another has been there for some time), as it represents the easiest way in which for the banks to reset rates + amounts (assuming that there is also a P reduction component ==> not so, here). Equally, with what they are dealing with, it is likely that the SFA /BB facilities are on 30D rollover terms, as opposed to 90D.
12 months ago, the banks might have been extending on 90D rollover but since 28/12/16, I reckon that they have reduced this (ie: increased the frequency) to 30D rollovers. So arguably, a rollover maturity date of today (judging by all the references being to 28/12/16, which was the relevant ASX announcement date, so could well have been referring to 27/12/16 + 26/5/17 being the required recapitalisation date.
As for any additional funding (an absolute imperative) being required, both the amount, the ability and the participation will itself add to the issues list, as you have suggested.
Re: my own calculations on the SFA, I was getting close to a BP spread of 400, so your 3.5% certainly makes a lot of sense. Regardless of this however, any future funding, whether new, or rolled over, with no longer enjoy the benefit of cheap rates such as LIBOR + margin, or AUBB + margin. For SGH, those days are gone (already), but in any event, from May17 assuming that survival (in one form or another) occurs.
To date, the banks have potentially lost (assumed zero recovery were to occur) ~$737M on payment to date of interest and bank fees totaling ~$75M. In real terms, the cost of funds have probably been in the order of 2% to the banks (perhaps up to 2.5%) meaning that this has cost them $30 - $35M on the funds currently outstanding to SGH, but higher than this if based on the originally announced facilities of Mar15. So, not much in the way of either benefit or enjoyment to date for the banks, either. Hence why the rest of the professional services sector has suddenly (since year start) a general tightening of conditions, behaviour and response.
SGH Price at posting:
10.0¢ Sentiment: Sell Disclosure: Not Held
