some thoughts before bedtime

Folks,

If you are reading this, there is a chance you are sweating your Centro holding and wondering if you have done the right thing. Come on, admit it; you are playing over scenarios in your head about it going wrong but at the same time dreaming what you could do with all the loot if the SP runs tomorrow.

If you are truly worried about your holding, I wanted to rattle off a few points which may help you sleep better tonight. There are no guarantees in this life, but we can certainly look for strong clues in deciding out fate.

So here, in no specific order, are reasons to feel good about Centro:

1. It is the second largest shopping centre owner in Aus and the fifth largest in the US. The company has major diversity by tenant and geography. The majority of centres are anchored by a major retailer, primarily grocers. No one retailer occupies more than 3% of the book. Even in an economic downturn, people still go to shopping centres to shop and buy groceries.

2. Aside from Andrew Scott getting the flick, the entire senior leadership team has remained in tact. No mass exodus, no blame-gaming. No dummy spits.

3. There have been no resignations from the board as often happens in a crisis. Not even the chairman. No dummy spits here either.

4. We have a well qualified, experienced CEO who until now has shown leadership and control. He knows the US portfolio inside out - he should do, it was him that sold it to us in the first place!

5. We have an excellent advisory team who were recruited early in the piece and have stuck with it.

6. The company outlined a plan right from the beginning and have stuck to it without fail. There has been no implosion, panic or AFG-like distress. All very professional.

7. The company has said all along that it is sticking to the sale of CAWF, CAF or equity injection. They have had "hundreds of calls" for individual properties and could "sell them within a week", they have just chosen not to. They have received interest in the funds.

8. Last week the company announced it had refinanced all of the debt apart from $200m, which represents 3% of the outstanding. The US noteholders who were kicking up a stink have fallen into line with the debt extensions.

9. The underlying business is going very well and delivering good results. It will continue to do so - it's performance is not based on the value of the properties but the way the asset is being tenanted.

10. Dividends are being withheld within the company and funds to help with cashflow and maybe pay down debt. This is a very smart more.

11. The CEO has told us that the banks are NOT putting pressure on the company to fire-sale assets.

12. To our knowledge, there has been NO fire sale of assets to date. Don't you find this odd? I mean if it was all going to custard and the roof was falling in, wouldn't they be floggin stuff off left right and centre? No fire sale; no panic.

13. The company took all of the major write-downs in the December half. Whilst there might be some more to come, it seems like they got rid of the dead wood early. (Unlike AFG who are about to do it).

14. The US looks likes avoiding a catastrophe. 2/3 of the assets are in the US, where interest rates have fallen dramatically.

...and finally, for goodness sake, it has been nearly 5 MONTHS since the meltdown. If Centro was insolvent or the banks really wanted their money back, they would have liquidated the place, not agreed to debt extensions.

I'm sure you can add many more of your own so please do.

Good luck tomorrow everyone.