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Non-Tech : Cityscape Financial (CTYS) -- Ignore unavailable to you. Want to Upgrade?

To: TNH who wrote (1304)	10/22/1997 2:45:00 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 2544

TNH: I do not know how far it will bounce, I think thast a 50% bounce from the actual bottom could be a lot, this may get it to mid 3' if the bottom was today, the problem I have is the number of shoes dropping around, the agencies keep droping the ratings, the company's margin are under pressure and I think that since they got hit already, they will take as big a right off without damaging their net worth too much. They have a portofolio of 2 Billion roughly of which 25% is in the UK. In the UK, I believe that about 16% of the loans are non performing, that is probably where they may take a hit. I would not be surprised to see them reporting something like $3 MM in loss or close to a buck. That will bring their net assets to about $170 MM. They may use the occasion to write off a bunch of their existing computer system (since they are going to replace it with a system from Otacle, I know not what do they carry this at but you could see another $5 MM there, and possibly another $5 to $10 MM on their domestic portofolio. These are all absolute guesses. But if these guesses materialize, then we end up with a net book of about $160 MM. To that we should add $100 for the conversion of the prefered (unless these are already on the asset side since these are not indenture, I'd better check that, except I do not have a very recent balance sheet), and get net book of $260 MM. Since I assumed conversion of the floorless, I would throw in (on top of the 40 MM shares) about 30 MM shares and get a total of about 70 MM shares. That would give you a book value of about 3.75/share. This is probably as high as it will goo for the time being, IMHO. If the floorless preferred are already on the asstes side, that we are going even lower before a major bounce. Zeev