re: Ann: TSE: TSI Fund Capital Structure Revi... When you say...

re: Ann: TSE: TSI Fund Capital Structure Revi... When you say legislation, I assume you are talking about the carbon trading. I wonder if TSI actually balances itself. I have not checked, but I wonder if the carbon due will be offset by the carbon credit from the wind farms.

In any case, the carbon emmissions scheme, really has two buffers for TSI

1) I think the world (rightly or wrongly) has decided they dont want to pay for carbon offsets for many years; what chance for the WORLD govts to agree, ha ha

2) The govt has, as you alluded to, decided to protect the existing power plants 'for a while'. Again, with no legislation no one know really what will happen. And I would guess that legislation in the 'odd' chance it is started in parliment in 2012 (min) will have many years of non harm to the exiting plants. The way the govt should behave is to leave exisit infastructure alone and simply say NEW infastructure must be green.

Now the big question is if you believe in inflation or deflation. Deflation will cause the returns to be less and the capital worth less. Inflation would be good for TSI as they have their debt in place until 2015 (are the terms clear in the material). And also TSI will amatorise some of the debt, so with inflation, the gearing will drop greatly and eps up.

To me I just have no idea where to park my money. TSI seems a good each way bet at low 70s. If nothing changes you get 10-11% return. If inflation comes I think the eps will go up and value of capital increases. If deflation comes I will slowly sell my shares.

If my thinking is off base, point it out. I am just trying to be so conservative in these times.