I assume CCP would argue that the capital raising and higher level of impairment was done in an abundance of caution. Covid impacts (and stimulus) were still in thier infancy at that time. It also ties into the relatively conservative image the company potrays of itself.
It's interesting you think the cash pile is well beyond CCP's ability to collect on, at least for next couplr of years I guess, unless it wants to repeat mistakes of the past. Maybe acquisition optionality was part of the mix.
Certainly PNC looks in a World of trouble with Caryle walking away from purchase, and turning the screws on PNC's bridging finance it provided. The standstill agreement with Carlye expired on the 17th of Aug. They announced at target of July 17 for refinance in a announced earlier this year which was missed.
Appears the 140m it needs to refinance is tough going. The Carlye loan has a maturity date of Sep 20, so Carlye could put them into administration at that time I think. Also 40m in bonds that were refinanced successfully. All up 181.7m in debt on a carry value of PDLs of 266m, pre covid impairment.
They announced 101m in 'liquidations' for FY20, assuming thats gross collections, which by your metric of collections/pdl value is comparatively low at 38%. FY19 was about 47%, again low compared to CCP and Encore... Am I on the right track there? Seems on top of impairments needed for covid yet to occur, on that measure PDLs may be inflated to begin.
CCP Price at posting:
$20.02 Sentiment: None Disclosure: Held
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