Ann: Preliminary Final Report, page-11

I think the covenants are likely to be a little different to AXL on account of the use of warehouse funding vs SIV which predominately is funded via Syndicated Senior Debt.

If you have a look at their statutory reporting it includes the statement

The securitised debt is classified as current as the Company has breached its Securitisation Facility covenants as a result of the FY18 statutory loss. A waiver was obtained before 30 June 2018 and is in place until 30 September 2018.

Presumably this goes some way to detailing what that pesky covenant in question actually is.  

The second part of that quote above is a bit of a give away about what happens next, if it was a statutory loss covenant then it wont be re-tested at the end of 30 Sept as it isn't (generally) a statutory reporting period.  Suggests to make that the waiver was granted subject to some aggressive debt reduction strategy.

Talk of putting in subordinated debt to me is crazy, Mezz guys would surely look at this as relatively thinly capitalised given the write downs.  Recapitalising losses with expensive debt surely doesn't sound that prudent at this time; maybe a bit further down the track when there the wardrobe is absolutely clear of skeletons.  

To me the 'right' albeit painful call needs to be to raise fresh equity, whether SIV have admitted this to themselves yet, im not sure.

One thing you can be sure of, after all this, funding costs (whether comprised of debt or equity) will be going up.

The quicker they can get this gangrenous limb chopped off the lower the risk that it infects the wider business and maybe, just maybe we might trade at above book value.

p.s. i really think they could have done a better job of exiting the sector.