Centro woes mounting in Australia; CBA, NAB, ANZ exposed

Centro, the Australian shopping centre group trying to refinance A$4 billion of debt, has signalled it is unlikely to meet a December 15 deadlline to find fresh cash, leaving its bankers in control of the group and facing large losses. The Sydney Morning Herald reported this meant Centro, which owns 1,500 shopping malls across Australia and America, is only a month away from bankruptcy.

Centro's current debt extension with its US lending group - mainly of institutional investors and pension funds - comprises an aggregate $US1.1 billion (A$1.2 billion), due on September 30. The debt extension with the Australian group - including the ANZ, Commonwealth, NAB, St George and the German West LB bank - comprises A$2.3 billion and is due by December 15, the same date as $US450 million owed to US private placement noteholders falls due. Only two weeks ago the ANZ and CBA said they were keeping a watching brief on troubled loans including Centro and would look at bad debt provisions.