Turners (TNR) bonds

[Snoopy]

So let's get going.

p13 of the bond prospectus lists the 'leverage ratio' as being the ratio of:

Gross Debt / EBITDA < 2.5

but only in relation to the 'Non Finance Covenant Group'. There appears to be no leverage ratio requirement on the 'Finance' group side of the business. This strikes me as being very odd. I would have thought that the leverage ratio of the finance side of the business would be far more important than the non-finance side. But I will go with it.

Please note that the segmented Gross Debt and EBITDA figures have been adjusted to allow for an appropriate proportion of head office costs.

FY2016	Gross Debt {A}	EBITDA {B}	'Gross Debt'/EBITDA {A}/{B}	Pass Test?
Finance Segment	$119.107m	$14.792m	8.05	Test not required
All Other Segments	$232.491m-$119.107m=$113.384m	$20.339m	5.57	>2.50, fail
Total	$232.491m	$35.131m

FY2017	Gross Debt {A}	EBITDA {B}	'Gross Debt'/EBITDA {A}/{B}	Pass Test?
Finance Segment	$158.647m	$14.073m	11.3	Test not required
All Other Segments	$384.917m-$158.647m=$226.270m	$24.771m	9.13	>2.50, fail
Total	$384.917m	$35.131m

Generally test results as far out as these two, would suggest I have made a mistake. However, as yet I can't find it. The only thing that is indisputable is that comparing 'like with like' statistics, TRA had a lot more leverage on the balance sheet at EOFY2017 when compared to a year earlier.

SNOOPY