Media Releases

• First debt repayment milestone of A$5 million met ahead of time
• Composition of investments portfolio and operating environment largely unchanged

Investments Portfolio

The composition by asset class of Keybridge’s investments portfolio as at 30 September 2009 is as follows:

Apart from foreign exchange movements, the portfolio is substantially unchanged from 30 June 2009.  In the September quarter, no new investments were made and repayments of $4 million were received. 

The Company provided a full update on market conditions and the status of its investments when it released its end-of-year accounts on 31 August 2009.  Since then, the operating environment has remained broadly unchanged.  In summary, this environment is challenging for the performance and realisation of Keybridge’s investments due to:

• Market liquidity being low, principally as a result of senior bank debt not being readily available, at a reasonable cost, for purchases of assets;
• Secondary market prices being depressed; and
• Cashflows flowing to Keybridge being reduced in some larger transactions as a result of market circumstances.

Currency Exposure

The approximate currency breakdown of the Company’s assets and liabilities is as follows:

This net foreign currency asset position means that the Company incurs translation losses when the Australian Dollar appreciates against the US Dollar and Euro and benefits from translation gains when the Australian Dollar depreciates.  Over the September quarter, the Australian Dollar appreciated against these other currencies.

Debt Facility

Under the new terms of the Company’s corporate debt facility, repayments of $5 million and $2 million are required to be made by 31 October 2009 and 31 December 2009, respectively.

The first of these repayments has been made and we currently do not foresee any issues meeting the second of the required repayments.

Outlook

The Company’s priority is to achieve realisations of investments to repay our debt facility.  As a result, our strategies are as follows:

• Keep our operating costs as low as practicable:  In this regard, we have reduced the size of the Keybridge management team during the September quarter from eight members to six.
• Bring forward investment repayments wherever feasible.
• In those transactions where market liquidity and pricing do not permit a realisation in the short-term, continue strategies to preserve as much value for Keybridge as possible.

Keybridge Capital is a financial services company that has invested in, or lent to, transactions which predominantly are in the core asset classes of property, aviation, shipping and infrastructure.

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