No I am not sure Winner. I am going by Fox's post on the TRA share thread which 'sounds' the most plausible explanation I have read so far.
Fox wrote p2358 on the TRA share thread:
-------
The distribution from the trust to Turner's has the lowest seniority after the more senior tranches are paid first. The reverse occurs for credit losses as well, any bad debts or impairments are covered by the lowest tranches first i.e. Turner's, then any remainder credit losses beyond that tranche are shared with the next tranche i.e. BNZ. This is why the finance receivables are still reported on the Group's balance sheet as they still retain the substantial risks and rewards of those loans.
The bonds referred to were the TRAHB sub notes of $25m that are held as security over the trust. These, along with other assets, provide that buffer to absorb any potential credit losses before BNZ up to the agreed upon 8% contribution by Turner's.
------
Fox sounded fairly sure of his facts.
My question to you Winner is that, if you are correct and the Trust issued notes to 'buy' the debt from Turners, why has there been no mention of these 'other' bonds in any announcement from Turners? I realise the trust is a separate legal entity from TRA. But TRA still carries the substantial risk from the trust. So just as the Trust receivables cannot presently be deconsolidated from the TRA results, I would expect the existence of any other bonds, including any issued by the trust, to be disclosed by TRA.
SNOOPY
Bookmarks