When MXT offered $150 bonds in November, S&P downgraded their $4.8 bln credit card bonds. PVN must be burning a lot of cash or receivables on more of its accounts either going bad or falling behind on payments.
Be careful not to confuse the ratings on securitizations with the rating for the company. The bonds are rated separately based on the risk associated with the securitized assets. These issuances are non-recourse to PVN. Whatever rating is assigned to the securitization is based on the likelihood of default on the underlying accounts, not on the creditworthiness of PVN.
If anything, a lower rating on a PVN serviced asset backed security means that PVN will enjoy higher servicing fees associated with collection of defaulted accounts.
However, a consistantly high default rate on asset backed securities issued by a given lender would be an indication of future difficulties of that issuer bringing new offerings to market.
Again, don't read a lot into this. This is normal course of business. You should only worry if you don't see periodic issuances.
Funny you should mention 60. I was having dinner at the four seasons with my insider info "guy" and after 3 1990 bottles of Opus one this "guy" was really running his mouth. Things are going so well "his" 5 year 60 dollar pps plan is now in "his" words a guaranteed 3 year plan.
What else did we talk about? Well, debt pre-payment, 750 million asset sell(got major premium) are just a few of the things we chuckled about. Then "he" went on to the good stuff, earnings. In which "he" said the time has come to stick it to the naysayer analysts and the providian bashers on wall street. With loan loss reserve well above fed requirements all profits are going into earnings and I'm going to spank every bastard who's downgraded, or said a negative word about providian. The time has come and Wall Street will see the new real Providian!
Laugh now, you'll be thanking me later, if you're smart.
Nope dont think so, all evidence suggest the opposite, feds would not let them retire debt if they were burning cash up. Either something good is up for PVN or its just a routine securitizations as has been suggested.