Just wondering what peoples thoughts are on Macquarie bank? I was thinking of about buying shares in Macquarie airport but I am kind of hesitant due to the way Macquarie structures the debt of its spin offs like Macquarie airport, Macquarie infrastructure etc.

Many people say to keep well away from anything Macquarie touches but is this due to people being unable to understand the Macquarie model? Is it because it is a new untested form of accounting?

My limited understanding of it is that they structure the debt so as to pay very little interest at the beginning of the loan period and a whole heap at the end.

“For instance, on both the Indiana Toll Road and the Chicago Skyway, interest payments are very low in the early years, which increases cash flow at first but leads to much higher interest in out years - akin to a mortgage with a low teaser rate. In 2007 the Skyway will pay interest of just $129,000 on $961 million of debt. But the interest payment for 2018 is to be $480 million - that's not a typo. “

I also read somewhere that for the tollways they own they paid $1.20 in franked dividends for every $1 in after tax profits they earned. (This was in about 2005-06)

They do it like this because they say that these assets will continue to grow through thick and thin (you can hardly stop driving to work if there is a recession and thus you can hardly avoid paying a toll) and I think they also have rolling price increases in things such as the tollways which were negotiated with the governments before they bought them.

These have a bit of info on it.

http://money.cnn.com/2007/09/17/news/international/macquarie_infrastructure_funds.fortune/index.htm?postversion=2007091810

http://business.smh.com.au/macquarie-model-blowtorched/20080404-23oy.html

Just wondering what peoples thoughts are on the Macquarie model are and for that matter is MAP a buy?

Dear Easy Times,

I've just googled, "Macquarie Bank - MAP," and was very impressed with
what I read.

You've probably already looked up their purchase of Sydney Airport, and their future intentions. It sounds impressive to me - and if I had the money to invest, I think I might go for it.

But - go to a few reputable financial advisers - and see which way the winds blowing.

I'm not any kind of knowledgeable expert.

So for whatever it's worth - after doing some "googling" - I'd say "It's a buy!"

Hey thanks for your helpful advice foxy. Yeah it looks like a good company on the surface as it not only owns part of Sydney airport but also parts Copenhagen and Bristol airports, a part share in a Terminal which is part of Tokyo airport. Its also part of a consortium trying to buy the 50 year lease of Chicago airport. With the way air travel is booming all of these airports should grow quite well.

The thing I am worried about is how they do there accounting. Its very shady and difficult to interpret. But I don’t know if this is because its something new which people are still not used too or is it something dodgey which will come back to haunt not only the investor but also Mac Bank

Precious metals needs looking at, or alternative fuel/power. Macq. bought up local radio stations in sth.Us to stifle resistance to the trans-mex/us/can highway (also their project) Does not sound like a pro-human company.Maybe great for greedy anything goes-investors.If you wanna do something for your country, setup some sort of co-op for indigenous people to bring indigenous food onto their plates.