In addition to the 700 person layoff, the company also announced they would not pay the quarterly dividend and withdrew earnings guidance for the 4th qt and all of 2002. Last month, they said they felt there would be a small profit. There investment bankers are going to securitize $900 million worth of receivables and try and find a buyer for $3 billion worth of high risk receivables. This is a company in real trouble. A lot of the news was anticipated but not withdrawing the earnings guidance.
Do you think Gulf State will try to buy those high-risk receivables? This could be a whole new market for them.
I doubt it Rich Guy. In order for someone to continue to charge the sort of interest rates that are in those portfoilio's, you would have to have a retail banking operation. If not, you wouldn't be allowed to "export" these rates to residents of other states without violating individual state usury laws. I think eventually, a metris, Associates, Capitol 1 will own them-someone that is familiar with the subprime market.
