ruddbank for cer

Todays news includes the story that Ahmed Fahour, good performer from NBA, has been made CEO of the as yet unnamed "Rudd bank" property financing vehicle which will be funded up to $A5 billion or so, half by the Federal Government, and half by the big 4 Australian banks.

Its role will be "To cover any shortfall in syndicated loans resulting from troubled foreign banks pulling oiut of the Australian lending market to repatriate capital" to quote the Australian today, 12.54 pm. Eric Johnston author.

The Federal government will likely benefit disproportionally from this initiative. Recovery of our great property trusts from this bank sourced trouble will cause a great recovery in the population's retirement savings' asset value, plus superannuation fund income. This will reduce the demand for more pension and social security payments for retirees who would otherwise have been more self funding. These are income stocks, first and foremost.

The next round of CER refinancing will be the rollover of CER's Australian prtfolio loans late in 2009.
Interest cover is good, so is occupancy, and the LVR is still quite positive.
This should benefit CER directly, as the uncertainty of the foreign bank lenders wanting out of anything they can get out of, without the fund having to sell assets into a sour and frightened market.

The removal of properties from the distressed sale inflow should be avery positive boost to market prospects for commercial property generally, in Australia and to valuations.

This is an astute move. I had not expected it from the ALP, but credit where credit is due.

It is probably one of the smartest and most effective moves yet made on the global banking scene in any country.
We really are starting to stand in our own two feet, financially.

To top it off the investors should get their money back and then some, including the interest cashflow that would otherwise have gone offshore.

Can only be a plus.