Rams Home Loans Fails to Refinance A$6 Billion Debt

I have to repeat what i wrote in "Honey, I shrunk the company"

"And this happened despite no exposure to the US subprime market and a 100% mortgage insurance for their loans..... "

Ich muß wiederholen was ich bereits in "Honey, I shrunk the company" geschrieben habe

"Bemerkenswert ist das dieser Verfall stattgefunden hat obwohl kein Bezug zu Subprime besteht und die Hypotheken zusätzlich abgesichert sind.

RAMS Website

If you are buying your first home, refinancing, self-employed; you
have no deposit, want to purchase an investment property or if you simply want to cut years off your loan and manage your money better - there's a RAMS home loan to suit you.

I can see lots of No DOC , 100 percent financing and zero downs at "All our Products"

Aug. 16 (Bloomberg) -- Australia's Rams Home Loans Group Ltd. failed to refinance A$6.17 billion ($5 billion) of short-term debt as buyers shun credit markets on concern that subprime losses will deepen.

The Sydney-based lender slumped as much as 59 percent on the Australian Stock Exchange. The shares fell to 80 cents at 12:27 p.m. in Sydney, compared with A$2.50 paid by investors before the stock listed on July 27. Rams has lost two-thirds of its market value this week.

Countrywide Financial Corp., the biggest U.S. mortgage issuer, dropped the most since the 1987 stock-market crash after Merrill Lynch & Co. raised the possibility of bankruptcy while Canada's Coventree Inc. sought emergency funding after investors declined to buy its debt.

``Lenders globally who rely on commercial paper for funding will be hurt as the liquidity taps are turned off,'' said Craig Saalamann, credit strategist at JPMorgan Chase & Co. in Sydney.

The longer it takes Rams to refinance, the more it will cost the company. The yield on its short-term debt has jumped to 25 basis points more than the London interbank offered rate, or libor, it said. The debt yielded less than libor about two weeks ago.
Rams got temporary funding of A$1 billion from two of its providers, it said in the statement.

Countrywide Financial would be in ``effective insolvency'' if creditors force it to sell assets at depressed prices or investors lose confidence in its ability to raise cash, Kenneth Bruce, a Merrill analyst in San Francisco, said in a research note yesterday.
> Oh boy..... This was his comment just a week ago....

> Mal wieder spaßiges von der Analystenfront..... Hier sein Kommentar von vor einer Woche....

Less than a week ago, Bruce had reiterated his buy rating on Countrywide

> Maybe he should read Paper-Money or every other Blog (Blogroll) to upgrade his analyzing skills and get a view outside his Wall Street office....

> Er sollte evtl. mal Paper-Money oder einen anderen Blog (Blogroll) besuchen um seinen Blick etwas zu schärfen und mal den Blick für das wahre Leben ausserhalb seines Wall Street Büro´s zu bekommen.....
Thanks to Bespoke

Emergency Financing
Coventree found buyers for C$600 million ($558 million) of asset-backed commercial paper after earlier failing to sell about C$950 million of the securities. This forced as many as 17 commercial paper funds in Canada to seek emergency financing from banks.

American Home Mortgage Investment Corp. and New Century Financial Corp. have already filed for bankruptcy.

Rams included a debt-market crisis among a list of potential risks in a June 27 document for prospective investors ahead of its A$695 million share sale.

UBS AG managed and underwrote the offering, when Rams forecast a 35 percent gain in 2008 net income to A$58.6 million.


> Good that eveybody tells us the markets are cheap based on future earnings projections..... :-)

> Nur gut das man jeden Tag zu hören bekommt das die Märkte günstig bewertet sind wenn man die zukünftigen Gewinne als Maßstab nimmt.... :-)

Disclosure : Short KBW Mortgage Finance Index (including Countrywide)