spoke to bnb, page-75

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“ 7. The key appears to be the guarantee issued by BBIPL. Section 12 of The Trust Deed states that "[BBIPL] unconditionally and irrevocably guarantees to the Trustee and the Holders the due and punctual payment of the Monies Owing."

8. If BNB cannot repay the face value, the Trustee will call the guarantee and the amount owing will become a liability for BBIPL. ”

You probably know this already, but worth mentioning the BBSN prospectus confirms that:

• BBIPL guarantees any amounts which become due and payable by Babcock & Brown on BBSN. Claims under the Guarantee are subordinated to the claims of all creditors of BBIPL (other than creditors whose claims are expressed to rank after or equally with the claims of Holders under the Guarantee), but in priority to the claims of BBIPL shareholders.

• Under the Guarantee, BBIPL guarantees on a subordinated basis the payment of any amounts which become due and payable on BBSN. • As the payment of interest is subject to deferral conditions, the Guarantee does not ensure that interest will be paid in all circumstances.

• Claims under the Guarantee are subordinated to the claims of all creditors of BBIPL (other than creditors whose claims are expressed to rank after, or equally with the claims of Holders under the Guarantee) and will rank in priority to the claims of holders of shares in BBIPL.

• The Guarantee, like other terms of the Trust Deed, may be amended by the Trustee, the Guarantor and Babcock & Brown in the limited circumstances set out in the Trust Deed.

• In the event of a Winding Up of Babcock & Brown, Holders will be entitled to receive a repayment of the Face Value and any Outstanding Interest on BBSN, after all creditors whose claims rank ahead of those of Holders have been paid in full, but before any distribution is made to Shareholders.

• On a Winding Up of Babcock & Brown, the Guarantee can be called upon to meet any shortfall in amounts due under BBSN although the Winding Up of Babcock & Brown may result in action taken in respect of BBIPL which would mean that no payment may be made under the Guarantee until all creditors of BBIPL which rank ahead of Holders are paid in full; and is an event of default under the agreement with the lenders under the Existing Corporate Facility and no payment may be made under the Guarantee until such senior lenders are paid in full.

• On a Winding Up of BBIPL, any payment under the Guarantee will be made after all creditors whose claims rank before those of Holders have been paid in full but before distribution is made to BBIPL shareholders. The Guarantee is subordinated to other debts and liabilities of BBIPL. In particular, payment by BBIPL, on a Winding Up of Babcock & Brown may be prevented by such arrangements.

The BBSN prospectus can be found at: http://www.babcockbrown.com.au/media/15530/bbsn%20asx%20release%20final%209.11.05.pdf

I hold BNB, not the notes, but I am interested in what is happening with the headstock.

Cheers,

ProjectX