Can IAG float our boat?

IAG's 'float' is recorded as an accounting liability, but it's a huge source of hidden value.

Suppose that Westpac has introduced a flashy new credit card with a unique set of terms and conditions. Like an ordinary credit card, this one offers a revolving loan of say, $10,000; but, unlike normal credit cards, it charges no interest and no fees. As long as you make your monthly repayment, you can keep the card maxed out.

You may have spotted the opportunity. Why not withdraw the $10,000 and put it into a savings account to earn interest?

Float is low cost leverage

Historically, better than free

Fair price; Hold


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