Debt/Equity, page-30

Thanks for this thread!

I'm looking at DDR as a possible buy, and I'd like to talk about the debt some more...

In the 1H16 financial report on 24/8/16, it says "Current Borrowings comprising a receivables purchase facility with Westpac finished $10.0m lower, at $80.0m versus the prior period $90.0m. "

I looked up "receivables purchase facility" and it seems to mean that DDR have an arrangement with Westpac that allows them (after paying interest and/or other fees) to get instant cash for unpaid receivables, and then Westpac collects the money from the customers, e.g. http://legalbeagle.com/6455464-definition-receivables-purchase-agreement.html: "Receivables purchase agreements allow a company to sell off the as-yet-unpaid bills from its customers, or "receivables." The agreement is a contract in which the seller gets cash upfront for the receivables, while the buyer gets the right to collect the receivables. The seller gains security, while the buyer gains a profit opportunity."

This $80m is the lion's share of DDR's debt (with long-term debt of $38.9m at 30 June 2016).

If DDR management have chosen to manage their receivables in this way, is this necessarily a bad thing? Without the $80m, long-term debt looks much less scary at $38.9m.