| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers B > Headlines for Babcock & Brown Ltd. > News item |
Babcock & Brown receives trigger notices on subordinated notes, lacks funds for repayment
By Caroline Salls
Pittsburgh, Feb. 13 - Babcock & Brown Ltd. received trigger event notices on its subordinated notes listed in Australia and its subordinated notes listed in New Zealand, according to a news release sent to noteholders.
The company said the trigger events occurred because the company's ordinary shares were suspended from trading for a period of 20 consecutive business days.
As a result of the trigger event, noteholders can request exchange or repayment of the notes by March 6. However, Babcock & Brown said it does not expect to be able to repay the notes on the May 13 realization date.
Babcock & Brown said it is considering a possible restructuring of the notes.
According to the release, at the time of the issues, the notes proceeds were on-loan to Babcock & Brown's principal operating subsidiary, BBIPL, and payments under these loans were expected to be the principal source of funds for paying interest on the notes and/or repay the notes.
However, the company said its right to be repaid is subordinated to the rights of BBIPL's bankers.
Given the subordination arrangements, the company said BBIPL is unable to repay the loans made by Babcock & Brown with the proceeds of the notes issuance.
Therefore, because it does not have access to other sources of funds to make payments under the notes, the company said its board of directors does not believe Babcock & Brown will be in a position to resume paying interest on the notes or be in a position to repay the notes.
The company is asking the noteholders to amend the terms of the notes to avoid insolvency.
Any restructuring proposal will be subject to approval by a special resolution of the noteholders and must be completed by March 15.
Babcock & Brown is a Sydney, Australia-based investment and advisory firm.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.