"Operating cashflow of $99M, down from FY08 $227M was very weak. 2H09 in particular was surprising, with only $29M cashflow on our calculations. This provides the fund will minimal firepower to reduce fund level debt.
Credit metrics seemed to have weakened, with higher gearing and lower interest coverage. In our view the key ratio is the corporate debt ICR, which has a default trigger of 1.5x. Lenders have tightened the definition of this key ratio by changing the numerator from distributable cash to actual cash distributed (from assets to the fund)."
So the banks have tightened the screws even further. Not only has the interest rate been ramped up but the default metrics have been tightened. They are a low breed those banks.
BBI Price at posting:
9.1¢ Sentiment: LT Buy Disclosure: Held
