Babcock & Brown taking another absolute beating this morning....

Babcock & Brown taking another absolute beating this morning. The main issues are the breach of the $2.5bn market cap trigger on their debt covenants and uncertainty about the reaction of the banks. The trigger was at 750c but the share price is now down below $5. Concerns about underperforming satellites – BBP in particular. The impending finalization of BBP’s $2.7bn loan facility. An S&P credit rating downgrade. ANZ removing BNB and BBP from their approved list for margin lending purposes. Short selling. Merrill Lynch cutting their target price from $24 to $7.50 this morning. UBS cutting theirs from $25 to $6.80 (but say there is significant upside if the banks allow them to continue trading). There is also talk of the company being privatized (an MBO). 40% of the stock is owned by staff.

From Air midday report