I think it is very much a positive and a relatively modern offering: previously financiers had to grow organically. The idea is that you can borrow wholesale, lend retail (ie: add your margin), then 'sell' the gross value of the loan book you created, get your money back and do it again. The alternative in history was forever having to find new depositors or investors and risking it all when rates changed course.
Westpac is among the largest and most aggressive in equipment finance and it regularly does the same - and it has a current $2.5 bil, 31 year, 1 month BBSW plus 105 bps for residential real estate - 5.35% - that gives Westpac the opportunity to sell loans, get its capital back, then sell more.....conduct the activities related to administration, etc priced into the sale - it's a good thing.
I think part of your post relates to the corporate debt.........if so that needs to be financed and paid for from business activities.......if they sold a loan book to pay off corporate debt...........it could be done but I think they would be strangling themselves (ie: business growth). Perhaps programmed repayments or a CR will be the preferred avenue
MME Price at posting:
9.1¢ Sentiment: None Disclosure: Not Held
