What do people think about the S&P rating?Melbourne, June 12,...

What do people think about the S&P rating?

Melbourne, June 12, 2008—Standard & Poor's Ratings Services today said that it had placed its 'BBB/A-3'
ratings on Babcock & Brown International Pty Ltd. (B&B International) on CreditWatch with negative
implications. This action follows the recent rapid slide in the share price of its listed parent Babcock &
Brown Ltd. (B&B Ltd.; not rated), which could trigger a review of B&B International’s A$2.8 billion
facility from a 25-bank consortium.
"The CreditWatch negative reflects the risk that a fall in B&B Ltd.’s market capitalization to below A$2.5
billion may trigger a review of the facility. Should the share price fall result in the banks serving notification
of a review, the rating will likely be downgraded by one or more notches, and remain on CreditWatch
negative, pending progress on any review," Standard & Poor's credit analyst Sharad Jain said.
Standard & Poor’s understands that a fall in market capitalization to below A$2.5 billion does not constitute
an event of default for the facility; rather it may trigger a review event, under which B&B International will
be entitled to negotiate in good faith over a four-month period to reach an agreement on a remedy or
resolution. There are no restrictions on the use of the facility during this period. If at the end of the fourmonth
consultation period, no agreement is reached, the lenders may ask that the facility be repaid within 90
days.
Standard & Poor’s had revised the outlook on the B&B International rating to negative on May 28, 2008
following B&B International’s willingness to extend limited funding support as bridging finance to Babcock
& Brown Power. Babcock & Brown Power has recently been adversely impacted by production disruptions
due to a gas pipeline fire.