looking forward, page-10

Hi Newjo - the price of all the TIM related securities depends on the overall health of TIM. What watford was pointing out is that the TIM and TIMPB are related by the terms of conversion. At the end of September TIMPB holders can convert their shares into TIM shares at a maximum ratio of 4 TIM per 1 TIMPB.

At yesterday's closing price of 11 cents for TIM, that implies a value of TIM of 44 cents to be even, and before taking into account TIMPB is scheduled to pay a 6.75% fully franked dividend in September and TIM may not pay any dividend this year.

What this means is that if you want exposure to TIM for longer than just a short holding, TIMPB represents better value. If you are really interested in this company, you should also look at their notes (TIMG) or their bonds (not sure of the code). TIMG propably represents the best overall value right now for getting into Timbercorp, but their are some downsides relating to the length of time until conversion (2011) and probably more illiquidity than TIMPB.

But if TIM can't make it through the next year, they will all be next to worthless. This is a real possibility, hence the desirability of the shorter time to conversion for TIMPB.

On a positive note though, I noticed that Agricultural Land Trust recently purchased land in Victoria for timber which they will lease to Elders. They paid $1.15m for 172 hectares, or about $6700 per hectare. If this block is respresentative of what TIM is trying to sell, it shows there is a market for it and that the price is sufficient for clearing TIM short term debt.