what to look for in the announcement, page-12

Swap

I totally agree.

The things that concern me are:

· Increased finance costs; the banks will want to be compensated for the increased risk and their cost of funds.

· Impact on future dividends; the institutions will not come back in force until a dividend stream is promised.

· Adviser and legal costs; true they are a one off but they must be mounting up.

· Impact of recent salary increases; they already dish out generous salaries and they recently got a pay rise as an incentive to stay on.

· Income tax; a fall in the carrying value of assets (due to impairment write offs and possible asset sales) might put the thin capitalization position over 75%. Should not happen, but if it did some interest would not be tax deductible. Hard to assess this from the outside looking in.

· Further losses from asset write-downs or sales at less than carrying value.

· FX risk; don’t know what the full exposure is – how is any risk being mitigated.


I would also like to mention that I think the moderators have done Dingo and Baron favor. They have the weekend off on HC. Their partners will be thankful.


I hold CNP and AFG – living dangerously.