good post bello...I run a coupla finance companies, dealing with...

good post bello...

I run a coupla finance companies, dealing with a lot commercial deals and also provide mezz funding myself when required.

I do know that several "non-bank" lenders have not been able to raise securitised funds over the past few months...

IE Liberty(although an email here tells me they have just raised 2bill)
....Pepper laid off most off its staff a coupla months back.....
Liberty residential wont take deals on residential loans for low writing brokers....and there are other lenders finding things difficult, just cant raise any funds.

It all stared from the US subprime debacle....lending high LVR's to people who couldnt afford it......especially on top of rate rises...loss of jobs.......higher living costs etc.

I still think the bubble will burst in AUS to some degree....many more fire sales, foreclosures are well up at the moment, even I as a mezz funder have dropped our LVR back to safer levels.

I watched the same program as you tonight.......seems their assets are top notch.....high geared in the wrong environment.

There are many provisions and laws which make it very difficult for a lender to just take the keys so to speak....they must give the owners due time to sell property at fair market value without added pressure......this sometimes involves freezing of interest too although uncommon.

I think Centro may find the finance tough......but an out would be to
...... capital raise to avoid insolvency and bring the LVR's back to say 60%, JV some property reducing the debt or sell off some stock.

I like the cap raising scenario......as the SP would benefit and the risk would come down due to the drop in exposure for the lenders.

The lenders may be happy to stay given another 10% buffer.

Would or could Centro raise a coupla bill in 8 weeks off the market??....probably not....however if I was a s holder, which I now am, and knew that the debt ratio would be dropped to 60% from 70%
......and the assets remain intact....one would think the SP would come back up to a more reasonable level.

my two cents worth