TCL's management must be very confident of being able to negotiate widening or extensions of this asset, or even introducing hot lanes as in the Washington area.
@Roy2U
Yes, that would have to be the case, in order to justify the purchase price.
Nonetheless, any such improvements to the terms of the deal will take some time before materialising, possibly years; therefore this acquisition introduces a degree of uncertainty as for the modelling of future cashflows that is unlikely to disappear any soon.
While this asset purchase alone does not change the way I view TCL as an investment, given the sociable size of the deal, any further “premium acquisition” along the same lines would have me reconsider my allocation.
Regarding the Westconnex bid, I do share all your concerns.
Cheers
P.S.: I cannot help noticing that both the 30-year ACGB nominal yield and the 2040 indexed bond yield are presently flirting with their 2-year lows (3.19% and 0.68% respectively); so much for the “inexorable" rise of interest rates.
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