Last time I posted.....suggestion - or at least a possibility...

Last time I posted.....suggestion - or at least a possibility was presented, that commercial paper market is slowly freeing up. (supporting links were provided)

Would it be totally out of the rhelms that a Nov no vote could subsequently be followed by XCP refinancing in Feb 2008. Well the whole credit crunch only started 2 months ago.....remember the big stockmarket selloff. Things can change quickly..... from these levels, anyway I am happy to buy still. (even if the Westpac deal went through). Only own 2 other stock and cannot find anything else to buy.

This stock is more compliex than most......RAMS is unique in the Australian market place, as to the way the do their business. Traders are stuck with the stock and would not know where to start to research. Probably too hard for me....and I sure wish had never pressed the buy button in the first place.......but I just guess from experience and how the stockmarket works something is there.
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SO KEEP THAT IN MIND WITH THESE COMMENTS

IF YOU ARE A BEAR-YOUR CHOICE NOT TO READ FURTHER

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1/ The issue of net corporate net....(you know the amount of $136 million. I have placed a phone call to Mattew Hogan to get to the bottom of this once and for all. Note their balance sheet..........which shows a total equity credit of $4.4 million. A Westpac payment in a couple of months of $125 million should increase their assets to net $130 million..... would it not.
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2/ They have a $13.7 billion loan book....remember RAMS is only trying to refiance $6.17 billion of the total amount. This loans has been extended until Feb 2008 at +25 basis points over LIBOR.

Balance of their funding comes from Warehouse and Term Bonds calculated at a margin just over the 30 day. See below:


CURRENT BASE RATE

Interest Rates - Current Base Rates available at Think Tank:
Official Cash Rate 6.50% last RBA meeting 3rd October, 2007 (steady)

30 Day BBSW 7.01% month commencing 10th September, 2007

Guess: $30 million nett surplus cash flow 2007/8 (always look at surplus cash ahead of profit figures)

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3/ This lack of refinancing is a direct result of subprime home defaults in the US. RAMS loans ARE not subprime....(AAA+ rated) home loan defaults in Australia are low and RAMS loan book problems are the same as the overall industry average. Check for yourself eg NAB low doc loans. (big point that one)

Why on earth would aussie banks NOT want their book.

They are paying the price of poor credit disclipine in the States.....


Spoke to a RAMS franchisee....he is very confident about the viability of the old RAMS, post Westpac deal. Keep stressing strong sharp management. RAMS loans means ongoing commissions for present franchisees, regardless of Westpac deal.
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Having said all of the above......this is too complicated for detailed understanding.....too many unknows. So don't buy on the post. Maybe consider holding your present stock if you are long. Items on the balance sheet have become so important now because of the low base (capitalisation) of the company.

There are heaps of other issues...churn - no don't think so (they wrote an almost unbelievable $2billion of that total $14 b in the late 1/4 of 2006/7.)

Growth-well half their new loan are refinancing anyway....is that not potential for growth - maybe, I don't know for sure.

Sharp mgment to look at entry into a new business model when things settle down - what I was told.(Well they will have plenty of cash)