spoke to bnb, page-9

I've looked at the 2007 annual report and it is very misleading. This is the whole problem with babcock and brown... the company structure was so complicated that it was hard to work out what was real and what wasn't.

Have a look at page 114 of the 2007 annual report. Have a look under the "Babcock and Brown Ltd 2007" column and have a look for the asset called "Notes receivable". I'm pretty sure these are the subordinated notes. What are they an asset? Because BNB borrowed the money from us and then BNB LOANED the money to BBIPL. Read the prospectus for the BNBGs and it discloses some of the information about this loan. I think the notes also show up under "Interest bearing liabilities" a bit further down the column (although the amounts are slightly different). So The notes show up as an asset and a liability on the balance sheet and effectively cancel each other out. But where is the money, its in BBIPL where the assets are. What is the nature of the loan between BNB and BBIPL? Who knows?

I really don't think we can rely on the 2007 annual report as a very good guide ... the structure of the company is just to complicated.