INVESTMENT firm Babcock & Brown has begun meeting with its bankers as the financial houses consider whether to enforce a review of the group's $2.8 billion syndicated debt facility.
B&B lost half its market value last week as investors questioned its complex, debt-fuelled structure and worried that the loss in capitalisation could result in debt defaults or covenant breaches.
The funds manager has defended its financial robustness and credit position a number of times in the past few business days.
The company reaffirmed today that a fall in its market value below $2.5 billion did not constitute a debt default or breach of covenants for the $2.8 billion facility. The company's bankers had included the capitalisation clause in documents for the three-year facility, which was signed off in April.
It allows the syndicate of 25 bankers the right to call for a review of the facility if B&B's market value falls below $2.5 billion.
"The facility banks have not yet made a decision as to whether such a review action is appropriate," B&B said.
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