B&B ditches margin loans
Babcock and Brown has moved to clean up its debt exposure, announcing to the Australian Securities Exchange today that it had retired over $250 million of short-term margin loans since December 31, 2007.
The company said this had been achieved from existing resources and that it had received commitments for new term finance to replace all the remaining outstanding margin loans secured against marketable securities in Babcock and Brown managed funds.
It said the new term financing facilities contained no market price-based convenants, no margin call obligations and no obligations to post additional collateral based on the prevailing market price of securities in the company’s managed funds.
Commenting on the move, Babcock and Brown chief executive Phil Green said it removed all short-term debt secured against marketable securities in the company’s managed funds and confirmed a statement made last week that Babcock and Brown had no intention or requirement to dispose of any interest in the managed funds.
“This announcement further demonstrates that we continue to have multiple funding sources, and in particular we have a large number of strong banking relationships that provide us with flexible funding solutions to support our business,” he said.
AUTHOR
Mike Taylor
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