QAN 1.47% $5.52 qantas airways limited

Underwriters off the hook - almost

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    From my reading of 7.1 (r) of the underwriting agreement for the recent rights issue, the underwriters are half way to getting out of their agreement to underwrite the issue.

    It states that if either the DJIA or the ASX200 falls by more than 10% from the index level as at close 20 August, and stays there for 2 consecutive days, then the agreement is finished.

    The DJI closed 8872 on 20 August, 90% of that is 7985. Close last nite was 7942, so another down nite tonite and finito.

    The underwriters would have no doubt hedged their obligations, so if the agreement is over then those hedges would need to be unwound.

    Any thoughs out there?
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