CRE: Centro Properties "struggling to refinance debt"
Submitted by
CalculatedRisk on Mon, 12/17/2007 - 6:38am (23 comments)
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What are Centro's traditional funding channels that are currently kinked closed? Is it CP they can't roll over or what kind of instrument?
CR, Tanta, it would be great to have a section on Greenspan's comments over the weekend.
With all due respect, Peripheral, I disagree. Too much time and energy has already been wasted on that gasbag.
My question: Are nearing the end of the beginning, or the beginning of the beginning?
--
My latest editorial on economy/debt/inflation:
"Reckless" Lending By Central Banks and Its Consequences
Safe Haven | "Reckless" Lending By Central Banks and Its Consequences
Enjoy!
Jas
Well I actually have some sympathy for them on this. While many of us predicted the crash of the RE bubble, far fewer predicted the resulting seizure of the market for commercial paper. If we presume that the assets in question are actual CRE, and not bonds or CDOs*, they should be able to get far enough in front to avoid bankrupcy.
No one could have known.
Except for half the blogs on the Internet.
Off topic. How it all started. The beginings and the end of subprime from the group of five insiders.
Subprime Securities Market Began as `Group of 5' Over Chinese - Bloomberg.com
Did inside knowledge aid Goldman in shorting the market?
I believe "slump" is only accurate for up to a 50% drop. 76% in one day isn't a slump. If you've ever seen a "slump test" on a construction site they don't involve large sudden movements. Plummet might work better. Or, perhaps, free fall. I'm sure our professional writers will fine tune this type of thing in the coming months.
BTW, I was reading John Mauldin's latest newsletter (whom I usually like), and I'm sad to see that even he is in the "Waaaah! Last rate cut made the markets go down!!!" category. "We need more rate cuts and we need them now!"
Then he goes on to talk about the surge in inflation and makes no reference to the $30 dollar explosion in oil prices last time the Fed cut 50 bps. I guess in his mind we need another $30 tacked on to the price of oil so the hedge fund industry can have another nice quarter.
Everyone seems to have the same philosophy these days:
1) Businesses fk up real bad.
2) Businesses demand that the Fed step in and fix their fkups with rate cuts.
3) Nobody demands that businesses fix their own f**kups.
This kind of thinking is a recipe for deep-rooted long-lasting economic decay.
12th,
I believe you are correct and that would qualify as a slope failure...
Moin,
Flashback March 2007
Centro Properties of Australia is set to become the fifth-largest operator of shopping centres in the US after agreeing to buy New Plan Excel Realty Trust for $3.7bn in cash. The deal is the biggest acquisition to date by an Australian real estate investment trust in the US. Including debt, it amounts to $6.2bn. Centro said it would finance the takeover by issuing new shares worth A$1.25bn in both the company and the trust, as well as raising a further A$750m from fund inflows and hybrid financing. JPMorgan Chase will underwrite the share offering.
Nice timing.......
Been away all weekend--has there been coverage in comments of FHA "modernization" moving forward rapidly in Congress?
Looking for the final, end-of-the-line bagholders? Check the mirror.
ac
Does that stand for alternating current?
One post you are saying rates should be raised or held and then you are saying the fed should monetize the debt and now you are saying everbody is saying the same thing. Even you it seems to me!
Just saying!
CR, that's uncharitable and piling on, 'No one could have known.
slope failure
Slope failure, also referred to as mass wasting, is the downslope movement of rock debris and soil in response to gravitational stresses.
Mass wasting might be a good one as well. Today there was mass wasting on Wall Street as charts experienced slope failure
12th,
Yes that often occurs when too much liquidity goes in the wrong places...
ac= agony (for) cats
another cat (please)
I don't have sympathy for those who borrowed in short term markets to fund long term assets, including actual real estate. Just like lenders they were mispricing risk--short term credit is cheaper, but of course there is more risk that it won't be there when you need it. That is why you pay more for longer term money if that is what you need.
Did inside knowledge aid Goldman in shorting the market?
Don Coxe (BMO Nesbitt Burns) raises this point in his excellent weekly conference call available for replay on the internet (pop-up blocker off).
http://events.startcast.com/events/199/B0003/#
Coxe uses an interesting trick of creating a strawman (cynical Bush haters) who wrongly raise the assertion of a conflict of interest whereas Paulson talks up subprime debt while Goldman is expanding short positions. Coxe then slobbers all over Paulson as a wonderful Treasury Sec.
BUT HE SAYS IT !!
Coxe could have kept his mouth shut rather than go to all the trouble of insuring that neither his or his companies name could be associated with the comment - hence the strawman.
We shall see if this story has legs.
NC Jim, Thanks for the link. I've always found Don Coxe's comments to be well thought out. Another interpretation is that some Goldman insiders may of been intentionally feeding Paulson bad information so they could get their shorts on.
Im way late on this, but GREAT story!
Centro Properties Group, the owner of 700 U.S. shopping malls, slumped 76 percent Monday after the company said it was struggling to refinance debt linked to the subprime mortgage marke