someone got a bargain with afgha yesterday, page-12

Stephen Mayne summed AHUGA up for me in Crikey on MOnday - As far as I can tell, when you buy AHUGA securities you are essentially providing a very highly geared margin loan to David Coe and his mates. Following the big margin call reported in the paper the other day, do you really know what the assets are that AHUGA relies upon for its capital value???:

FROM CRIKEY:

This crisis of confidence all comes together when you look at trading of securities under the code AHUGA. This is $250 million of hybrid debt that David Coe and his friends use to finance their shares in Allco Finance Group, which are held through the Allco Principals Trust (APT).

The AHUGA notes pay interest of $9 a year but I bought 9 of them at $60 each today as they have plunged from $105 last June. When debt securities trade at 60c in the dollar you are talking serious default risk and these numbers explain why.

The Allco Principals Trust (APT) balance sheet is looking pretty sick today because it has $724 million in bank debt and its biggest asset is 45.8 million shares in Allco Finance Group, which at the low of $3.40 today were only worth $156 million.

APT also owns 24.4 million shares in another vehicle Allco HIT (ASX code AHI) – which has today plunged 14c to a record low of 80c and were trading at $4 last March. This holding is today only worth only $20 million.

Surely all this means the big APT margin call is coming, which will really test the private wealth of David Coe and his mates. Allco founder John Kinghorn still has the $600 million in cash he banked from the disastrous RAMS float. Maybe he’ll co-ordinate the rescue.