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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (23742)4/13/2006 8:31:47 PM
From: Carl Worth  Read Replies (1) of 78734
 
i don't think it's as likely that defaults would start to be a problem due to interest rates, since the loans are already in place, and are largely fixed rate debt...as such, the companies qualified for those loans at a known cost, to both the borrower and the lender, unlike an adjustable mortgage or the like

i'd be more concerned about these companies if and when the economy slows down

CSE in particular makes fairly short term loans, as you can see by the maturities in their recent collateralization

biz.yahoo.com

as such, they should be fairly well insulated from defaults, since it would seem unlikely that a significant number of their customers would have their respective businesses turn down substantially in that short a time
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