Ann: Trading Halt , page-5

I am not amazed they got the money. They have solid assets and this raising is at a massive discount. If you ask me, at 7.5c a share they got a great deal and so did GNS at 10c. I would hardly call ELD, GNS or FEA "junk". It's amazing how things change over time. If any of those companies had less debt 2 years ago, analysts would have accused them of having a "lazy balance sheet". Now the quote is "back to fundamentals" and all of a sudden a company with a "lazy balance sheet" is what people want to invest in. Rightly so in this environment, because the banks are happy to lend in the good times, but want to renogiate facilities and charge millions in refinancing fees as soon as a covenant is breached - which is usually brought about by a short-term economic impact.

Can you just imagine what chaos there would be in the residential housing market if banks were able to renegotiate terms if the loan to value ratio (LVR) on your home (valued by bank paid valuers) went to say 85% if they were able to impose debt covenants of 80% LVR???

It's not just the "investment" banks that are responsible for this mess. Let this be a lesson to us all I hope that the govt legislates against "covenants" as they are virtually unheard of in the US. From the bank perspective, why don't they just lend companies less and leave themselves enough headroom so there is no need for these covenants? The answer is surely $$$$$$$$$$$$$$$$$$$$$.