I think of TCL the same way. Essentially it has a wide moat and whilst highly geared so are many similar infrastructure assets like SYD. The reason is that because cashflows are so predictable the banks will gladly fund these businesses. I note the concerns if interest rates rise but I would suspect that there is a formula in the pricing models agreed with the regulators to reflect the increasing cost of debt in calculating the WACC and resultant allowable charge. Therefore it seems a volume game to me with some protection against increases in interest rates. Price increases may flow from the higher cost of debt but at the end of the day people will adjust as long as the increases are not extreme. After all there are not many options.
TCL Price at posting:
$12.00 Sentiment: Hold Disclosure: Held
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