Babcock & Brown (BNB) Stocks

Submitted by Craig Strzelecki on 18 September, 2007 - 11:37

Babcock & Brown (BNB) has a reiterated Buy stock recommendation and a share price target of $32.62 from Australian stock analyst Macquarie Research Equities. Today's agreement to sell several wind farm portfolios to BBW and last week's announcement of an IPO of an aircraft portfolio, BNB has laid the groundwork to exceed its recently raised earnings guidance of "approximately 40%" EPS growth in CY07. Babcock & Brown today announced an agreement to sell 50% of its Enersis wind farm portfolio to BBW for $219m (including a first right of refusal on the remaining 50% interest), along with its US07 wind farm portfolio for $374m. These transactions require BBW shareholder approval at its upcoming AGM on 9 November. B&B Air Initial Public Offering (IPO): BNB last week filed a prospectus in the US to raise about US$500m in an IPO of its Jet-i aircraft portfolio, valuing the assets at US$1.6bn. Note that a US$853m debt securitization for this portfolio was completed on August 4 at a competitive rate of LIBOR +35bps. With Babcock & Brown (BNB) earnings in 2007 now underwritten should these transactions proceeds, the focus turns to CY08. In this regard, we view the group as likely to begin 2008 well given the strong development pipeline (double the 2007 pipeline) and funding capacity across the group and its satellite funds (>$8bn of excess cash and/or undrawn debt facilities).

Babcock & Brown Limited is listed on the Australian Stock Exchange (ASX) under stock code BNB. You can view their investor website here. Babcock & Brown is involved in investment banking, structured finance advisory, arrangement and management businesses, principal investment and other wholesale financial services. BNB was listed on the ASX on 6 October, 2004. Phillip Green is the Managing Director of Babcock and Brown. Find out the meaning of the recommendations in this primer. More Babcock & Brown (BNB) shares recommendations and news. Browse for other stockbroker recommendations. Read a previous share recommendation for Babcock & Brown (BNB).

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