I agree that the earnings look fairly sound and the dividend is almost the only infra fund that can pay out of operating cashflow (ignoring required investment cash flows).
My only bug with the income is the enormous loss they have booked on interest rate swaps - UK rates havent fallen enough to lose the money there. Nor do I see how they could lose so much from the fixing the USD purchase debt. Credit spread increases would be a gain to MCG. Maybe its FX losses on cross currency swaps on a rising AUD? The lack of disclosure makes it difficult to tell. I dont trust the inflation swaps they did either. I assume these were done with MQC as the counterparty and with inflation going through the roof in the UK and US I assume that they have sold a pretty amount of the inflation adjusted portion of the transmission contracts for a large loss (again some disclosure would be appreciated).
Definitely agree that BBP has tainted the whole sector in recent days. Whether by luck, skill or an aggressive parent, the Maccas satellites have avoided the liqudity rumours of BBI, BBP et al. However I think that a growing body of instos are turning sour on the governance structures around these funds and this could be the ultimate cap on returns for retail investors. Riskmetrics released a (free) insightful report on the governance of Ozzy infrastructure funds at the start of April.
Its perhaps telling that MQG no longer launches retail funds - it focuses on wholesale limited life funds instead.
Holding and not happy.
Si
MCG
macquarie communications infrastructure group
