ING Industrial Fund - What's happening??

[Bouncerdog]

Can anybody tell me what's going on here? 52wk nosedive from 282-33. Yesterday it went from 70 to 33 and finished at 63. :eek:

In the past I've owned small industrial buildings so I sort of like this sector. Six months ago I had a look at these as they were falling and thought they were OK and so bought a few. Just following the market down with no real reason, I thought. (Probably foolishly)

A look through the company reports looked good to me. Reasonable levels of gearing. $5.6bn assets, $2.6bn debt (at 5.4% interest when their average rental yield is 7.1%) No serious refinancing in the near future. Good rental yields and high occupancy rates with longish leases.

Now I do know that the whole world is crazy at the moment but I just don't get it.

Why the massive sell down? Is it just more fear or is there a reason?

[Huang Chung]

Reports that the fund was close to breaking banking covernants.....

http://business.smh.com.au/business/goodman-tipped-to-chase-500m-20081024-587e.html

[Bouncerdog]

Thanks. I saw that, but don't really know what it means.

I thought that it might be to do with falling asset values putting them at higher risk. ie higher geared.

But even if they do break covenants, what happens?:confused:

[Bouncerdog]

Doh! Perhaps I should have just googled "Bank Covenants" instead of posting and showing my ignorance.:o

Now I start to see. Recent sales to repay debt. And if they break bank covenants and have to refinance then this may possibly not be the best time....