Interesting isn't it BB (what timezone are you in?). So they...

Interesting isn't it BB (what timezone are you in?). So they move a bunch of assets from long term hold accounting categories and into available for sale and voila its worth a tonne less than what the accounts were saying before (wonder how many other banks are in that boat - a lot!) and now they are technically insolvent.

If the assets are kicking of cash (which they are) and they have a good chance of being sold for more in the future (which I would have to say is possible) then it totally makes sense for the banks to convert some of their debt to equity (preferred equity I would guess), that way they keep it alive and kick of some cash to service the reduced debt and hope that they can orderly sell the assets over a 2-3 year period for more than they could today in a firesale.

I wonder also what sort of games B&B are playing at also, are the write-downs appropriate? Are they too little so not to spook the banks? Are they too much to give it a good chance of upside and spook the banks into the debt/equity swap? who knows, with 20+ banks to negotiate with and god knows how many nationalities and their own issues anything could happen. Seems they want it to go on though for a bit anyway.......

Not sure it was the right thing or not but I sold the rest of my equity and bought more of the BNBG's yesterday, next week will be real interesting.