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Reece, I wouldn't mind hearing your opinion on this.

The Business Spectator has a nice new interview with Phil Green:

http://www.businessspectator.com.au/bs.nsf/Article/KGB-INTERROGATION-Phil-Green-CV4VJ?OpenDocument

There is one thing about this interview that concerns me, were Robert Gottliebsen asks Phil Green about their notes. I didn't realise that these notes yield 30%, and I'm not that satisfied with Phil's answers.

Here is an extract:

RG: Why do you think your listed notes yield around 30 per cent. Do you think that might have something to do with the 78 per cent look through gearing?

PG: Look, we think that in this market there is an enormous amount of dislocation in valuation. We think they probably trade at that because of very low liquidity. I mean if you look at the volumes, the amount of actual debt that’s traded over the last month at that price, I don’t think it adds up to a lot in a month.

RG: Why don’t you buy them back? At that price.

PG: Because we don’t want... because at this point in time, you know, we want to preserve our liquidity to grow our business… on the one hand you say you say we should be de-gearing, on the other hand you want us to increase our gearing.

RG: It’s just the amount – the 30 per cent tells you that the... it’s a very high figure and anybody…

PG: Robert... Robert... in this market if people want to judge the sustainability and the strength of our business off the back of where our hybrids trade on very thin volumes then that’s their judgement. All we can do is deal with our business, run our assets, manage our balance sheet in the way that we think is most effective.

There may be a point in time where... the best thing we can do with our cash is buy back our notes. ...We manage our balance sheet the way we think it’s best managed and at the moment notwithstanding where those are trading, the rate of return that we get on supporting our development business in wind energy is still much higher than buying back those notes.