Ann: Completion of Senior Loan Refinancing and Eq, page-8

re: Ann: Completion of Senior Loan Refinancin... Hi Snowfree.

"I factored in the risks of earthquake and tsunami, but not the nuclear plant issue. It taught me a lesson"

Yes, the market is a hard task market and the lessons can be painful. Let me say that you were not alone in this, so do not be too hard on yourself.

I think that just about all investors me included believed the engineers, nuclear power plant operators and government that these reactors are completely safe and disasters like we have seen could never happen.

IMO, given that we can not even make child proof anything, our chances to design absolutely fail proof complex systems are nil.
Specially, when we challenge the extremes of nature.
All extremely safe systems have weak points and according to laws of probability, given sufficient time, these weak points will be exposed.
All that us humans can do is to learn from these disasters, either avoid this technology alltogether (we no longer use CFC's as refrigerants, we do not add lead to our petrol) or include these risk factors in next design and retrofit the changes where possible. These retrofits could prove extremely expensive and sometimes impossible to incorporate in the old design. So the power generators gamble and this time they lost.
Electricity, being the essential service, they losses will have be be somehow covered by Japanese taxpayers, as the power company decision makers humbly apologize and pretend to commit hara-kiri.

We can thank our lucky stars, that AJA properties were not seriously affected, at least that is the last advice from the management issued soon after the first and biggest earthquake event.

In addition to all this there is another threat looming IMO.
It costs now almost 90 yen to buy one Australian dollar so the total amount in $A available for distribution is diminishing rapidly. I believe that the next distribution has been hedged, but not the next ones.

So unless the rents rise, property values improve or Ausie stops rising, we could see further erosion in our distributions.

As you probably aware, luckily for me, I have halved my exposure to AJA just before the disasters struck, having seen better opportunities elsewhere. As always, I will be scrutinizing AJA fortunes with magnifying glass with my finger near sell button twitching nervously.