ASX Release

27 September 2006 BABCOCK & BROWN SUBORDINATED NOTES PRESENTATION Please find enclosed a Babcock & Brown (ASX: BNB) Subordinated Notes Investor Presentation. For further information please contact: Kelly Hibbins Babcock & Brown +61 2 92291800 About Babcock & Brown Babcock & Brown is a global investment and advisory firm with longstanding capabilities in structured finance and the creation, syndication and management of asset and cash flow-based investments. Babcock & Brown was founded in 1977 and is listed on the Australian Stock Exchange. Babcock & Brown operates from 22 offices across Australia, the United States, Europe, Asia, United Arab Emirates and Africa and has in excess of 810 employees worldwide. Babcock & Brown has five operating divisions including real estate, infrastructure and project finance, operating leasing, structured finance and corporate finance. The company has established a funds management platform across the operating divisions that has resulted in the creation of a number of focused investment vehicles in areas including real estate, renewable energy and infrastructure. For further information about Babcock & Brown please see our website: www.babcockbrown.com

Babcock & Brown Subordinated NotesInvestor presentationSeptember 2006

2

No offer or invitation to apply for Babcock & Brown Subordinated Notes (BBSN) is being made in this presentation.

To the maximum extent permitted by law, the BNB Group (including Babcock & Brown Asset Holdings Pty Limited) and the Joint Lead Managers, and their respective officers, employees and agents, and any other person involved in the preparation of the offer documents, disclaims all liability and responsibility, including any liability arising from fault or negligence, for any direct or indirect loss or damage which may be suffered through use or reliance on anything contained in, or omitted from, this presentation.

The offer of BBSN in Australia will be made in, or accompanied by, a copy of the prospectus dated 27 September 2006. Anyone in Australia wishing to acquire BBSN will need to complete the application form that will be in the prospectus after the offer opens. No applications for BBSN from a New Zealand resident investor will be accepted or money received unless the subscriber has received a copy of the prospectus dated 27 September 2006 and investment statement to be dated on or about 3 October 2006. Any New Zealand investor wishing to subscribe for BBSN must obtain a copy of the investment statement and prospectus and complete the accompanying application form. The prospectus and investment statement are important documents, and prospective investors should read carefully the offer document relevant to them before making an investment decision.

This presentation is being made to participating organisations of Australian Stock Exchange Limited and primary market participants of New Zealand Exchange Limited (Retail Brokers and Institutions). The purpose of this presentation is to enable Retail Brokers and Institutions to: make a decision about a firm allocation for which they may wish to apply; and, plan for the selling program in respect of the offer of BBSN.

In the case of primary market participants of New Zealand Exchange Limited, this presentation is provided for their internal use on the basis that they are a New Zealand resident entity or persons whose principal business is the investment of money or that they are New Zealand resident persons who, in the course of and for the purposes of their business, habitually invest money.

The information in this announcement is general information only, is not investment advice, and does not take into account the individual investment objectives, financial situation or particular needs of an investor. Consequently, prospective investors should consider whether an investment in BBSN is appropriate for them in light of their investment objectives, financial situation and particular needs (including financial and tax issues), and seek professional advice from their financial advisor or other professional advisor before deciding whether to apply for BBSN.

The prospectus and investment statement do not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. In particular, BBSN have not been and will not be registered under the US Securities Act of 1933, and may not be offered or sold in the United States or to or for the account or benefit of a US Person as defined in Regulation S under that Act.

IMPORTANT NOTICE NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES

3

AGENDA1. Summary of BBSN offer

2. Information about Babcock & Brown

3. Use of proceeds

4. Key terms of BBSN

5. Bookbuild and timing

Appendix: Financial information

4

1. SUMMARY OF BBSN OFFER

15 November 2015Maturity date

15 November 2010First reset date

Six month BBSW plus margin of 220 basis pointsInterest rate

Up to A$135 million with the ability to accept up to A$15 million in oversubscriptions Offer size

Guaranteed on a subordinated basis byBabcock & Brown International Pty Limited (BBIPL)

Guarantee

Babcock & Brown Limited (BNB or Babcock & Brown)Issuer

A$ denominated, unsecured, subordinated, cumulative, resettable notesSecurity

100% of the issue may be reserved for clients of the Joint Lead Managers, Co-Managers and other participants in any bookbuild determined by the Joint Lead Managers

Firm offer

Fixed issue price of A$100 each; Minimum A$5,000 and thereafter in multiples of A$1,000Applications

Floating rate paid semi-annually until the first reset dateInterest

The initial interest period will be from settlement date to the next interest payment date, 15 May 2007

Initial interestperiod

5

BBSN IN THE BNB GROUP STRUCTURE

Offer proceeds

BBSN

Offer proceeds (BBIPL Loan) 77.7% ownership

22.3% ownership

Unsecured and subordinated

guarantee

BNB

BBIPL

Operating companies

Ordinary shareholders

US Executive Stakeholders

BBSN Holders100%

ownership

6

AGENDA1. Summary of BBSN offer

2. Information about Babcock & Brown

3. Use of proceeds

4. Key terms of BBSN

5. Bookbuild and timing

Appendix: Financial information

7

BACKGROUND OF BABCOCK & BROWN

Aircraft operating leasing business

established (BBAM) (JV with Nomura)

1989

First Real Estate principal investments in AustraliaEarly 90s

Prime Infrastructure floated onASX 2002

Babcock & Brown formed in San Francisco1977

Sydney office opensFirst cross border lease executed

1982 - 1984

AIDC acquisition

1997

HVB injects capital and takes 20% stake2000

Japanese Real Estate

business established

1998

Rail leasing business

established (BBRM)

1999

Asian Infrastructure business established 2002

First major Corporate Principal Investment (AUSDOC)2001

European Real Estate business established 2003

Electronics leasing business established (BBEM)2002

Commencement of non-leasing structured

finance business outside Australia

1992-93

BNB IPO Oct 2004

-

First UK PFI

1996project

Commencement of -

venture company with venture company with Formed a joint

Nomura (NBB) to carry out Japanese cross border leasing1986

Formed a joint

Nomura (NBB) to carry out Japanese cross border leasing1986

BBSN IssueraisingA$265.8m Dec 2005

BBSN2 IssueRaising NZ$225m June 2006

BNB raise A$300m through equity placement

8

• Three principal business activities– Financial advisory– Principal investment– Funds management

• Focus on maximising revenue and ROE through integrated model – Origination through advisory and/or development including greenfield development– Securing/profiting from opportunity through principal investment– Recycling capital through Specialised Asset and Funds Management platform– Generating passive and recurring management fee income through Specialised Asset and Funds

Management platform– Recurring transaction and investment banking fees from managed funds– Funds and assets under management provide a platform for further origination activity

Principal Investment Funds Management

Financial Advisory

BUSINESS MODEL

9

• BNB operates through five business groups– Real Estate, Corporate Finance and Infrastructure groups are focused on advisory, investment

management and principal investment

– Operating Leasing group, operates in aircraft, rail and electrical equipment. Includes investment management and principal investment

– Structured Finance group, traditionally advisory in nature. Increasingly focused on the underwriting, structuring and distribution of investment transactions

• Specialised Asset and Funds Management platform sits across the business groups

Real Estate Corporate Finance Operating LeasingStructured Finance Infrastructure

Specialised Asset and Funds Management platform

B&B Japan Property

Trust (BJT)

B&B Capital Limited (BCM)

Aircraft Warehouse

Syndicate One

Structured Finance CDO’s

B&B Infrastructure

(BBI)

B&B Residential

Land Partners (BLP)

B&B Global Partners (BBGP)

BBRX Rail Syndicate

One

B&B Wind Partners (BBW)

BGP Investment

Sarl (GPT JV)

B&B Direct Investment Fund (DIF)

CBRailB&B

Environmental Investments

(BEI)

Everest B&B Alternative

Investments (EBB)

UK PFI Assets Under

Management

OPERATING DIVISIONS

10

• Total AUM and FUM grew by 41% over the six month period.

• Compound annualised growth rate of 68% in AUM and FUM since listing.

$Billions

11

17

22

31

31 Dec 04 30 Jun 05 31 Dec 05 30 Jun 06

GROWTH IN TOTAL AUM & FUM

11

• Growth in AUM and FUM has been spread across a variety of listed and unlisted capital sources.

• Future growth in AUM and FUM is expected to be in both the unlisted and listed space.

• There will be a focus on diversifying BNB’s capital sources away from the Australian market.

3

1

77

3

78

4

1

9

11

7

1

12

0.1 0.10

2

4

6

8

10

12

14

Listed Funds Unlisted Funds Private Equity Specialised AUM

$Billions31 Dec 04 30 Jun 05 31 Dec 05 30 Jun 06

AUM: Assets under managementFUM: Funds under management

SPECIALISED FUNDS AND ASSET MANAGEMENT PLATFORM

12

• A$31.2 billion of total Specialised Funds and Assets Under Management as at 30 June 2006

23417510.0B&B Residential Land Partners (BLP)1,0157747.2B&B Capital Limited2 (BCM)1,30086916.2B&B Wind Partners (BBW)

11,073

5521,205

1676,600

Jun 2006(A$m)

5,510Total Listed Funds

3155Everest Babcock & Brown Alternative Investments (EBB)7204.8Babcock & Brown Japan Property Trust (BJT)31726.8Babcock & Brown Environmental Investments (BEI)1

2,340 8.0B&B Infrastructure Limited (BBI)

Specialised Funds Under ManagementListed

Mkt CapJun 2006 (A$m)

Ownership %

As at 30 June 2006

1,336-Everest Capital Limited3

6,64160

5,245

Total Unlisted Funds-UK retail property syndicates

50.0BGP Investment Sarl (GPT JV)Unlisted

857257600

Total Private Equity Fundsn/aB&B Direct Investment Fund

11.2B&B Global Partners4

Private Equity

18,571Total for Specialised Funds Under Management

Assets Under Management as at

FUNDS & ASSET MANAGEMENT PLATFORM

13

June ’06 (A$m) Ownership %As at 30 June 2006

31,159Total Specialised Funds and Assets Under Management

2,017-Structured Finance CDO2,111-PFI/PPP5,891-- Air

51050CBRail22330BBRX Rail Syndicate 180242.2Aircraft Warehouse Syndicate1

--Other Operating Leasing AUMs

12,588Total Specialised AUM

1,034-- Rail

Assets Under Management

Notes:1. Environmental Infrastructure Limited completed a restructure on 5 July 2005 and at that time changed its name to Babcock & Brown Environmental Investments Ltd.2. Includes capital committed of A$500 million in Babcock & Brown Capital Limited.3. Assets under management (AUM) figures incorporate Everest Capital managed funds excluding EBB.4. Represents capital committed.

Assets Under Management as at

June ’06 (A$m)Ownership %As at 30 June 2006

31,159Total Specialised Funds and Assets Under Management

8,460Operating Leasing10,178Infrastructure

6,744Real Estate

2,017-Structured Finance3,760Corporate Finance

Segment Analysis

Specialised Funds & Assets Under Management as at

FUNDS & ASSET MANAGEMENT PLATFORM(continued)

14

EARNINGS COMPOSITION• Net profit after tax attributable to the Babcock & Brown Group for the six month

period was A$163m — an increase of 48% on pcp. This growth generated:– Basic EPS growth of 48%

– Fully diluted EPS growth of 44%

– DPS of 15¢

• The result exceeds the guidance released at the Company’s AGM in May 2006 of 35% EPS growth for the six month period ended 30 June 2006

• Specialised Funds and Assets Under Management grew 41% from A$22bn at 31 December 2005 to A$31bn at 30 June 2006. The business is well positioned to grow this number significantly in the second half of 2006 and into 2007

• Upgraded Basic EPS growth guidance for 2006 from “at least 35%”, given in late May, to 45%. Achieving this guidance will be dependent on market conditions over the period. The successful execution of all current fund initiatives targeted for 2006 will result in BNB exceeding the upgraded guidance

15

Net revenue by division for the 6 months ended

30 June 2006

Net revenue by type for the 6 months ended

30 June 2006

Net revenue by region for the 6 months ended

30 June 2006

EARNINGS COMPOSITION (continued)

16

• A feature of the six month period was the growing contribution from our Specialised Funds and Asset Management platform, representing 40.3% of net revenue compared to 22% in the pcp¹

• The increase in Development Activity reflects financial close and sale of a number of wind farms in Europe, US and Australia and real estate development projects in Australia and Italy

• Principal Investment activity was maintained over the period with activity spread across all business divisions

• Again in 2006 we do not anticipate any single transaction representing more than 5% of net revenue

1. This % may reduce in the 2H as the majority of performance fees are paid in the 1H of the year.

0

50

100

150

200

250

Base fees fromAUM and FUM

Co-InvestmentIncome

Advisory feesfrom AUM and

FUM

Performancefees from AUM

and FUM

OtherOperatingIncome

DevelopmentActivity

PrincipalInvestment

Third PartyAdvisory fees

Jun-05Jun-06

* AUM: Assets under managementFUM: Funds under management

A$’m

STRONG NET REVENUE GROWTH

17

58.242.1Aircraft

974.522.7

169.0276.2448.3

31 Dec 2005$’m

608.7Wind farm projects395.3Gas power plant229.8Real estate projects

29.2Other1,305.0Total

30 June 2006$’m

• The increase in assets under development reflects the importance BNB places on the competitive advantage delivered by green field development in our core asset classes.

BALANCE SHEET – ASSETS UNDER DEVELOPMENT

18

• Basic EPS growth guidance upgraded from “at least 35%” given at the Company’s AGM |in late May to 45% for 2006

– Transactions required to achieve this result are all identified and well progressed

– Execution on all new fund initiatives is not required to meet 2006 forecast

– If we successfully execute on all new fund activity targeted for 2006 we will exceed this guidance

• Achieving this guidance is dependent on market conditions over the period

• Expect significant geographic expansion of our specialised funds and asset management platform as we accelerate the move to tap capital sources outside Australia

• Expect ongoing growth in Real Estate, Infrastructure, Corporate Finance Divisions, Operating Leasing, with the Structured Finance result expected to be in line with or slightly below 2005

• Intend to utilise capital resources efficiently - incremental capital may be required in light of current growth rates

• The employee base will continue to expand as we fill out the geographic presence of the various business divisions. Despite growth there is a continued focus on costs efficiencies

GENERAL BUSINESS OUTLOOK

19

AGENDA1. Summary of BBSN offer

2. Information about Babcock & Brown

3. Use of proceeds

4. Key terms of BBSN

5. Bookbuild and timing

Appendix: Financial information

20

• Significant transaction activity since 30 June 2005

Capital deployment

Capital recycling/raising

BEI 05- Jul -05- -05

A$13.5mBNB debt

restructure and capital raising -

converted to equity

capital raising -

12 -Jul-05B&B Global Partners -Unlisted A$550m investment fund

12 -Jul-05B&B GlobalPartners -Unlisted

investment fund

Acquisition of 10.6% of East Surrey

Holdings

23 -Sep -0523 -Sep -05

Acquisition of 10.6% of East Surrey

Holdings A$102m

26 -Oct -05BBW 15%

- -05

Investment A$39.3m

29--

Acquisition of Multiplex's interest in JV between,

- Sep 05

Acquisition of Multiplex's interest in

Primelife, Multiplex and BNB A$5m

26 -Sep-0526 -Sep-05

of certain assets

BNB vendor of certain BBW assets

18 -Jun-

BBI capital raising A$26m

- - 05 24- Oct- 05Investment in

PaceA$9m

- - 05

Feb-06$25.6m

investedin BBI rights issue

Dec-05BJT rights

issue$10.9m

17-Dec-05 €490 m invested in Enersis

Jan-06 Net proceeds

from sale of property to BJT

¥3.4 bn

Nov-05 Aircraft

Syndicate investment US $55.7m

Nov-05 BBSN1 Issue

raising A$265.8m

Feb-06ARGacquisition

A$853.5mn

22-Mar-06Equity interest In US$900mn

US propertyportfolio

Jun-0610% in BLPA$17mn

Aug-06A$317mnof NRG Flinders

Sept-06Contracted to Acquire €1 bnof European retail property

10-Oct-06Eircom-

InvestmentBy BCMA$55m

USE OF PROCEEDS

21

• Rate of transactions has exceeded expectations, resulting in:– Significantly higher profits than was envisaged at time of IPO– Employment of funds raised at IPO

• Significant pipeline of further opportunities over the short to medium term• Additional capital being sought to improve balance sheet efficiency and reinforce capacity

to capitalise on pipeline– A$265.8m from BBSN offer– NZ$225m from BBSN2 offer– A$300m from equity placement– Up to A$150m from follow-on BBSN offer

• Proceeds of BBSN offers applied to generally invest in the various business and investment opportunities available to BNB

• Number of specifically identified projects exist– Investment in aircraft and rail assets– Real estate opportunities in the US and Europe– Investment in wind farm developments in the US, Australia, and Europe– Investment in other power generation and infrastructure assets both through development and

by acquisition of completed assets

USE OF PROCEEDS

22

Actual • Corporate Facility drawn to A$854.9m as at 30 June 2006• A$265.8m of BBSN on issue from 1 January 2006• NZ$225m of BBSN2 on issue from 12 June 2006

Scenario 1 • Corporate Facility drawn to A$854.9m as at 30 June 2006• A$265.8m of BBSN on issue from 1 January 2006• NZ$225m of BBSN2 on issue from 1 January 2006

Scenario 3 • Corporate Facility drawn to A$854.9m as at 30 June 2006• A$265.8m of BBSN on issue from 1 January 2006• NZ$225m of BBSN2 on issue from 1 January 2006• A$300m of additional Ordinary Shares on issue from 1 January 2006• A$135m of additional BBSN on issue from 1 January 2006

Scenario 5 • Corporate Facility on the assumption it was fully drawn to A$1.32bn for the 6 months ended 30 June 2006

• A$265.8m of BBSN on issue from 1 January 2006• NZ$225m of BBSN2 on issue from 1 January 2006• A$300m of additional Ordinary Shares on issue from 1 January 2006• A$150m of additional BBSN (assuming oversubscriptions of A$15m)

on issue from 1 January 2006

• The interest coverage ratio of BNB and the effect on interest coverage under the following three scenarios for the six months ended 30 June 2006 is as follows:

6.9 times

5.8 times

5.3 times

4.1 times

SELECT INTEREST COVERAGE RATIOS

23

AGENDA1. Summary of BBSN offer

2. Information about Babcock & Brown

3. Use of proceeds

4. Key terms of BBSN

5. Bookbuild and timing

Appendix: Financial information

24

Issuer Babcock & Brown Limited, a company incorporated in Australia and listed on ASX

Security Babcock & Brown Subordinated Notes (BBSN) are Australian dollar denominated, floating rate unsecured, subordinated, cumulative, resettable notes

Offer 1.35 million BBSN at an issue price of A$100 per BBSN to raise up to A$135 million, with the ability to accept oversubscriptions for up to A$15 million

Reset Date The first Reset Date is 15 November 2010

Maturity Date 15 November 2015

On the Maturity Date, all outstanding BBSN must be either Repaid, or Exchanged (if a Holder requests an Exchange and BNB agrees)

ASX quotation Application will be made to ASX for quotation of the additional BBSN within seven days after the lodgement of the Prospectus

No NZX quotation Application will not be made to NZX for quotation of BBSN and it is not intended that BBSN will be quoted on the NZDX

KEY TERMS – GENERAL

25

• BNB is insolvent or such payment would cause it to become insolvent• Such payment would cause BNB to breach any legal obligation or • Directors determine that BNB has insufficient cash to make the

Interest Payment

Deferral conditions

Deferred Interest Interest will accrue on any Outstanding Interest on a daily basis at the Interest Rate plus 2.00% per annum. Deferred Interest remaining unpaid must be paid on the next Interest Payment Date where no Interest Payment deferral condition applies

Restrictions on BNB Until Outstanding Interest is paid in full, BNB will be prevented from:• declaring and paying any dividend or making any return of capital or other payment to its

shareholders• setting aside any cash or assets for that purpose• undertaking any arrangement, reconstruction or reorganisation, which would have a material

adverse effect on the value of the BBSN

Until the first Reset Date = Market Rate + Margin where• the Market Rate is the six month Bank Bill Swap Rate on the first Business Day of the Interest Period• the Margin is 2.20%Interest will generally be payable semi-annually in arrears

Interest Rate

The first interest payment to which the additional BBSN relate will be on 15 May 2007First Interest Payment

KEY TERMS – INTEREST

26

Reset of terms On each Reset Date, BNB may change certain terms of BBSN including:• the next Reset Date, provided that each Reset Date will be no less than 12 months after the

immediately preceding Reset Date and will also be an Interest Payment Date• the Exchange Discount• the Market Rate• the Margin• the Interest Payment Dates

BNB initiated Repayment, Exchange and Resale

BNB may Repay all or some of the BBSN on a Reset Date

BNB may Repay all BBSN:• on occurrence of a Change in Law Event• on occurrence of a Change in Control Event• on occurrence of a Delisting Event or• if the aggregate Face Value of BBSN on issue is less than A$50 million

Reset Date The first Reset Date is 15 November 2010

KEY TERMS – RESET & BNB EXIT RIGHTS

27

Investor initiated Repayment and Exchange

Holders may provide an Exit Notice requesting Exchange in relation to:• a Reset Date• a Trigger Event (Holders may also request Repayment)• a Change in Control Event or• the Maturity Date

BNB action upon receipt of an Exit Notice

Where a Holder requests Exchange, BNB may generally Exchange, Repay or Resell BBSN (or a combination of Exchange, Repay and Resell)Where a Holder requests Repayment pursuant to a Trigger Event, BNB may Repay or Resell BBSN (or a combination of Repay and Resell)

Exchange into Ordinary Shares

Upon Exchange the number of Ordinary Shares delivered to a Holder for each BBSN will be calculated as: Repayment Amount / (VWAP x (1 - ED))

Resale Upon Resale, BNB must ensure that the Holder is paid an amount at least equal to the Repayment Amount on the Realisation Date.

Where: • ED is the Exchange Discount of 2.5% (subject to change on a Reset Date)• Repayment Amount is the Face Value plus any Outstanding Interest as at the Realisation Date that will not be

separately paid in cash as interest on the Realisation Date• VWAP means, subject to any adjustments under clause 6.3 of the Terms or Issue, the average of the daily volume weighted average sale prices (rounded to the nearest full cent) of Ordinary Shares sold on ASX for each Business Day during the relevant Period but does not include any transaction defined in the ASX Market Rules as ‘special’, crossings prior to the commencement of normal trading, crossings during the closing phase and the after hours adjust phase nor any overseas trades or trades pursuant to the exercise of options over Ordinary Shares or any overnight crossings

KEY TERMS – INVESTOR EXIT RIGHTS

28

Babcock & Brown International Pty Limited (BBIPL)

Subordination on payments

Winding Up

Guarantor

Guarantee

BBSN rank equally with BBSN2. BBSN rank behind all other debt of BNB

BNB may issue debt ranking ahead of BBSN in right of any payment including payment of Interest and on a Winding Up

On a Winding Up, the rights of Holders are subordinated in right of payment to the claims of any creditors of BNB from time to time other than those whose claims are stated to rank equally with, or behind, the claims of Holders

BBIPL guarantees any amounts which become due and payable by BNB on BBSN

Claims under the Guarantee are subordinated to the claims of all creditors of BBIPL (other than creditors whose claims are expressed to rank behind or equally with the claims of Holders under the Guarantee), but in priority to the claims of BBIPL shareholders

BBIPL may enter into any transaction without restriction including issuing other indebtedness ranking ahead of claims of Holders under the BBIPL Guarantee

As the payment of Interest is subject to deferral conditions, the Guarantee does not ensure that interest will be paid in all circumstances

KEY TERMS – SUBORDINATION, GUARANTEE

29

AGENDA1. Summary of BBSN offer

2. Information about Babcock & Brown

3. Use of proceeds

4. Key terms of BBSN

5. Bookbuild and timing

Appendix: Financial information

30

BOOKBUILD

Joint Lead Managers& Joint Bookrunners

Co-Managers

• Volume only bookbuild—issue price fixed at A$100 per BBSN

• Close for brokers and institutions: 29 September 2006

• Firm allocations can only be received from the Joint Lead Managers & Joint Bookrunners

• Syndicate naming rights: Front cover of Investment Statement and Prospectus

Bell Potter Securities Limited

Grange Securities Limited

UBS Wealth Management Australia Limited

ASB Securities LimitedFirst NZ Capital LimitedForsyth Barr Limited

31

17 November 2006Holding Statements despatched by

20 November 2006Additional BBSN begin trading on ASX (normal settlement basis)

16 November 2006Issue Date

15 November 2006Settlement Date

10am 13 November 2006Closing Date

9 October 2006Opening Date

29 September 2006Bookbuild

27 September 2006Announcement of Offer and Prospectus lodged with ASIC

DateKey dates for the Offer (indicative)

15 November 2015Maturity Date

15 November 2010First Reset Date

15 May 2007First Interest Payment Date for the BBSN issued under the Offer

DateKey dates for BBSN

KEY DATES

32

AGENDA1. Summary of BBSN offer

2. Information about Babcock & Brown

3. Use of proceeds

4. Key terms of BBSN

5. Bookbuild and timing

Appendix: Financial information

33

179,988120,970Net profit

(71,649)(42,043)BBIPL minority interest

251,637163,013Net profit attributable to the Babcock & Brown Group, including BBIPL

(21,428)(3,863)Minority interest excluding BBIPL

273,065166,876Net profit after tax before minority interest

(59,897)(32,904)Income tax (expense)/benefit

332,962199,780Profit from continuing operations before income tax

(266,796)(167,461)Bonus expense (including amortisation of share options and bonusdeferral rights)

81,76576,558Share of net profits of associates and joint ventures

(117,044)(112,189)Finance costs

(423,547)(347,695)Expenses from continuing operations, excluding finance costs andbonus expense

1,058,584750,567Revenues from continuing operations

AIFRSSix months ended 31

Dec 2005

AIFRSSix months ended 30

June 2006

A$’000

INCOME STATEMENT

34

8,795,514435,0008,360,514Total Assets

246,557246,557Intangible assets

322,460322,460Deferred tax assets

131,426131,426Other assets

38,10038,100Property and equipment

237,155237,155Investments in joint venture entities

782,552782,552Investments in associates

146,050146,050Real estate held as investment property

127,307127,307Real estate held for sale

1,305,0931,305,093Assets under development

1,345,4461,345,446Power generation assets

20,99320,993Semiconductor equipment

1,406,4231,406,423Transportation assets

163,643163,643Finance lease receivable

437,121437,121Investments in financial assets

520,701520,701Notes receivable

205,541205,541Other receivables

232,515232,515Fees receivable from financing transactions

1,126,431435,0001691,431Cash and cash equivalents

Assets

AIFRS Pro-forma30 Jun 06

Pro-formaadjustments

AIFRS30 Jun 06

A$’000

49.7%53.2%Gearing ratio4

1,697,471300,0001,397,471Total equity

548,777548,777Minority interest

848,694848,694Parent entity interest in equity

249,763249,763Retained earnings

(96,596)(96,596)Reserves

995,527300,000695,527Contributed equity

Equity

1,697,4711,397,471Net Assets

7,098,043135,0006,963,043Total Liabilities

22,98522,985Other liabilities

366,924366,924Deferred tax liabilities

111,744111,744Current tax liabilities

17,27817,278Liabilities payable to pre-IPO owners

5,948,835135,00035,813,835Interest bearing liabilities2

124,446124,446Deferred income

154,099154,099Deposits held

351,732351,732Accounts payable and accrued liabilities

Liabilities

AIFRSPro-forma30 Jun 06

Pro-formaadjustments

AIFRS30 Jun 06A$’000

Notes:1. Assumes A$135 million of additional BBSN and A$300 million of Ordinary Shares are issued on 30 June 2006 and that the gross proceeds of the Offer and Ordinary Shares issued are held as cash.2. Interest bearing liabiliti3es, with the exception of the Corporation Facility (A$854.9 million drawn as at balance date) and BBSN and BBSN2, are recourse only to the assets of certain special purpose vehicles in the Babcock & Brown Group and are described as ‘non-recourse’.3. Additional BBSN liability recorded as interest bearing liabilities.4. Drawn Corporate Facility plus BBSN and BBSN2 (and additional BBSN, in pro-forma) divided by net assets plus drawn Corporate Facility plus BBSN and BBSN2 (and additional BBSN, in pro-forma) less intangible assets.

PRO-FORMA BALANCE SHEET

35

• Simon Maidment, +61 2 9324 3948

• Tricia Ho, +61 2 9324 3939

• Barry Sharkey, +61 2 9324 2926

Babcock & Brown

UBS (Australia)

UBS (New Zealand)

• Michael Larkin, CFO, +61 2 9229 1800

• Kelly Hibbins, Investor Relations, +61 2 9229 1800

• Andy Coupe, +64 9913 4878

• Jonathan Oram, +64 9913 4840

CommSec

• Chris Dickman, +61 2 9235 0122

• Tony Kench, +61 2 9513 9463

• Truong Le, +61 2 9513 9647

BBSN OFFER CONTACTS