RHG has fallen $1bn short in its quest to refinance a $5.25bn debt due to US commercial paper owners. As a result RHG has had to sell off $1bn worth of mortgages, leaving it with an attractive $13.2bn loan portfolio – which should generate more than enough income for us to do very well from here.
With $3.6bn of the warehouse funding falling due in May and June, the long term future of this business isn’t 100% secure yet. But it’s a lot more secure than it was. Despite rising significantly this morning, the share price is down 10% since 2 Jan 08 (Buy – $0.295) and RHG remains exceptionally good value. The half-yearly results are due at the end of February and we’ll provide another update then. BUY.
RHG Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
