I say the banks are working very closely with BEC (and in good...

I say the banks are working very closely with BEC (and in good spirit) presently and here's my take on it...from a macro level.

It's also my post on VPG...but the principles and thoughts very much apply to BEC as well.

CBA appear to be the bank cartel "enforcer" and if they force VPG into liquidaton or administration just think of the work involved in dismantling it. Look at the properties that will then flood an already thin marketplace.

Plus...CBA would have declared their "position" which will have to be applied to the others in the REIT sector not to mention the tens of thousands of private property investors who all geared up on much the same leverage principles.

That said, then surely they all have the same potential problems with LVR covenant breaches.

A breach, BTW, which doesn't mean the banks loan funds are exposed....just not as strongly secured as in a rising market.

And when the interest can be comfortably paid from the revenue streams why would you want to "pressure" the market?

Plus...who will they then sell the asset to?

The professional property mamagers are already in place within the REIT sector.

Why dismantle a REIT that is profesionally managed, pays its interest and has a plan for the future....even though its LVR might have drifted from say 60% to 68%...only to sell its assets to another hastily cobbled together group who use funds (which they withdraw from the banking system) to have an LVR at say 40% and who then employ the same poeple who are currently running the properties?

Not to mention the tens of millions of dollars in fees and costs from effecting this absurd change.

Not to mention the dislocation to tenants and the negative impact upon the whole business community... and the commencement of a potential litigation "snowball" that will take years to sort out.

Then there are the tens of thousands of mums and dads who by their initiative and hard work now have investment properties...and who are probably investors in the REIT sector as well.

Tell me... are there suffient of these reliable A Grade folk sitting in CASH just waiting to take all of these properties off those who already have them but, whilst struggling, are meeting their obligations?

I don't think so.

The banks know there isn't a queue lining up so that they can simply say "next please".

There's bugger all in the queue...that's the MAJOR point.

So...surely this is a time to work with the property owners and to partner with them so that a cohesive plan which suits investors and bankers alike is developed and implemented.

I believe this is happening now and that's why IMO we won't see any rash banker decisions against REITS as a result of the half yearlies.

Final Comment: If the banks "spook" the REIT cattle by acting capriciously there will be a stampede of epic proportions.

If this be the case...the banks will need a new division with thousands of "gun slingers" to clean this up. Down goes the bank revenue and up go the costs.