I spoke to a credit analyst for a hybrid group the other day who advised that the terms of the original prospectus apply. This is obvious but the key to this for me is that the stapled shareholders (i.e. only one shareholder being Brookfield Asset Management) cannot be paid a distribution if MXUPA holders are not paid their interest. So there is no way for the big Canadian parent to get money out of Australia if it does not pay the MXUPA coupon payments.
There are only two risks with MXUPA being (a) Brookfield Asset Management does not stand behind Brookfield Multiplex if it gets into trouble (unlikely in my opinion given the the strength of parent (see MXG thread) and (b) MXUPA becomes "perpetual".
Whilst (b) above is a risk, running yield from Step Up date is 28% which is fine for a perpetual. If redemption occurs in say Jan 2012 (conservative and reasonable guess), ANNUALISED RATE OF RETURN is 136% PER ANNUM in my calcs.
Propsectus does however state payments are non cumulative.
TIM Price at posting:
50.0¢ Sentiment: LT Buy Disclosure: Held
