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Strategies & Market Trends : REXI is jumping up! -- Ignore unavailable to you. Want to Upgrade?

To: Cube who wrote (68)	8/26/1998 11:05:00 PM
From: Paul Tran	Read Replies (1) \| Respond to of 83

The news is out. S&P rated REXI notes B minus. Stable. 1. There is no accounting irregularities. Some how Off Wall Street got this leaked from S&P rating and created this frenzy short. 2. The short wins the battle for the last 5 days, brought REXI down 50%. Now the short must pay its price. Cover it. Instead of "buy the rumor, sell the news" , now is time to "short the rumor, cover the news". 3. Also, SEC needs to investigate why OWS got this info from S&P rating. That explains why they keep holding to their short and waiting for the release from S&P, I guess. 4. REXI business is: "buy non-conforming loans at a discount, repackage its terms and rates for a profit". So non-conforming here must be rated B minus already, I guess. If the loans is conforming, it would be rated A. Right ? 5. 50% off from last 5 days, it's a bargain now. 6. The 12% notes will be due in 2004. Wednesday August 26, 4:43 pm Eastern Time Company Press Release SOURCE: Standard & Poor's CreditWire S&P Rates Resource America $115 Million Senior Unsecured Notes 'B-' NEW YORK, Aug. 26 /PRNewswire/ -- Standard & Poor's today assigned its single-'B'-minus long-term counterparty credit rating to Resource America Inc. [Nasdaq:REXI - news] and its single-'B'-minus rating to the company's $115 million 12% senior unsecured notes due 2004. The ratings are based on the concentration risk of the company's primary assets, commercial mortgages, and the transactional nature of this business. The firm's primary assets are distressed and nonconforming commercial mortgages, which Resource America renegotiated and are now performing loans. Resource America renegotiates the terms of these loans with borrowers to construct agreements that reflect the current economics of the underlying collateral. These mortgages are highly concentrated, both geographically and as to size of the individual loans. The size of the individual loans has been growing as well, increasing the risk of the portfolio overall. Continued profitability depends on the company's ability to locate distressed and nonconforming commercial mortgage loans for sale and then successfully renegotiate the loans. Other key assets include leases on office equipment to small businesses, and oil and gas partnerships, which are subject to volatile commodity prices. The office equipment leasing business is in a very competitive sector of this industry, although Resource America adds value through strong customer service. These concerns are mollified by Resource America's adequate, risk-adjusted capital and systems infrastructure. Capital, as measured by the debt to equity ratio, was 0.59 times at June 30, 1998, reasonable to support these risky assets. Resource America's systems infrastructure is adequate to administer its office equipment leasing business at its current rate of growth. OUTLOOK: STABLE The outlook is stable with the proviso that Resource America is vulnerable to numerous risk factors. These factors include the economy in the Philadelphia region, the company's ability to compete against much larger companies in the office equipment leasing business, and volatile oil and gas prices, Standard & Poor's said. -- CreditWire SOURCE: Standard & Poor's CreditWire