Navigating SGX.com is a bitch. BB has released a statement saying it owns no collateral loan obligation in the US. The statement is as follows:
In view of the recent media attention on the United States’ sub-prime mortgage market, Babcock & Brown Structured Finance Fund Limited (“BBSFF” or “the Company”) wishes to make a clarification in relation to the Company’s loan portfolio and securitisation assets.
BBSFF’s loan portfolio and securitisation assets currently have no exposure to the United States’ sub-prime residential mortgage market nor to its collateralised loan obligations (“CLOs”) market.
BBSFF’s securitisation assets are secured mainly against residential and commercial properties located in Australia and the United Kingdom. Two of its securitisation assets, Avoca VI and Avoca VII, are European CLOs which are backed by loans made to corporations.
Equally importantly, the Company is not exposed to margin calls on its debt facilities nor is its equity subject to investor redemptions.
The Company maintains its dividend guidance for the six months ending 31 December 2007 of at least 5.50 Singapore cents per share, as outlined in its SGX-ST announcement dated 15 May 2007.
BBSFF will release its first half 2007 financial results, along with a description of the performances of its loan portfolio and securitisation assets, on 14 August 2007.
Having no exposure according to them does not mean that they are not susceptible to the same problems. It also indicates the kind of risk they are facing as well. My research into this is still on going.