Anybody else notice slide 17 of the presentation accompanying LEP's half year results? These guys have debt maturing in 2011 that they have hedged out to 2023. Seems like a bit of a big gamble. If commercial propery debt markets including CMBS remain closed, they may have to repay the debt from asset sales or new equity and be left with a big derivative exposure not hedging anything. Something doesn't add up with their interest rate hedging either. They did their hedging in late 2007 and early 2008 when interest rates were at their highs. How can they claim an average interest rate of 3.14%? They refer to it as a "cash interest rate".... don't know what that is but it appears it isn't the real cost of their debt.
LEP Price at posting:
$1.51 Sentiment: LT Sell Disclosure: Not Held
