il consumatore americano dopo 15 anni sta cedendo - gz
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By: GZ on Martedì 22 Maggio 2007 01:05
Un articolo oggi del WSJ che spiega come per vendere auto, moto, barche, mobili, elettrodomestici ci sia ora in America un altro mercato dei mutui "subprime" (detti anche "tossici")
Si allentano sempre di più le condizioni per i mutui tipo promozioni di zero interesse per un anno, termindi di 72 mesi (!) e "re-aging" cioè se uno non paga la rata gli allungano tutti i termini del mutuo. E ovviamente vengono cartolarizzati e rivenduti in giro per il mondo
Somma questo al crac del mercato dei mutui immobiliari di fascia povera (di cui non si parla più), al record dell'uso di carte di credito in marzo ed aprile, +10% circa (in america ti costano un 16% e le usi se proprio non hai più niente altro per pagare ) e somma i dati di vendite al dettaglio disastrosi di aprile (dei -6% mese su mese ovunque con Walmart che ha avuto il peggiore calo mensile da quando esiste) e vedi che il consumatore americano dopo 15 anni consecutivi senza mai flettere un trimestre sta cedendo
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Retailers Add
Risk in Easing
Loan Terms
By KAREN RICHARDSON
May 21, 2007
National retailers of big-ticket items such as houses, boats and motorcycles aren't the only companies facing the prospect of more late payments and losses on their consumer loans these days. So, too, are smaller regional retailers.
But unlike mortgage lenders, which have been forced to tighten their underwriting standards amid the subprime meltdown, these smaller players -- and even some bigger niche players -- are trying to encourage customers to keep buying by offering more zero-interest loans and extended payment plans.
"At the end of the day, you do what it takes to get business," says Dennis Fink, chief financial officer of Haverty Furniture Cos., a home-furnishings chain based in Atlanta. In the first quarter, 55% of loans that Haverty made to customers were no-interest for longer than 12 months, compared with 40% a year earlier.
Those considering investing in regional retailers need to closely examine their customer-financing operations. In some cases, there is a risk that their loans could go bad; in others, easy loan terms are artificially boosting sales. Either way, investors need to figure out how the underlying business is really performing and how the market is valuing it.
Special financing enables customers to buy goods for a small monthly payment. For retailers, whose sales have been hit by higher gasoline prices and the housing slump, these promotions improve marketing and sales growth -- but can also increase the risk to their own future finances and their loan portfolios' credit quality.
"You're certainly going to lower the likelihood that customers will ever pay you," says Stephen Ryan, accounting professor at New York University's Stern School of Business. Like subprime-mortgage loans, which are for risky borrowers, special financing promotions tend to "appeal to people who are cash-constrained and have poor credit histories," he adds.
The possible upshot, as with the subprime-mortgage shakeout that has seen some of the loans go sour and pushed dozens of lenders out of business, is that these easy consumer-financing deals can go sour and weigh on the retailer making the offer.
The risk is amplified when companies extend payments further into the future for customers who have missed a monthly deadline, a practice known as "re-aging." It can also have the effect of making loans appear healthier than they really are.
For example, re-aging can allow a customer who is more than 30 days late making a payment on a 36-month loan to cover only the interest that month. In exchange, the company extends the lending period to 37 months. It then categorizes the account as current. Allegations of fraudulent re-aging at Conseco Inc. led to lawsuits and helped push the insurer toward its bankruptcy-court filing in 2002.
"We don't see [re-aging] as a way of masking" delinquencies, says William Nylin, executive vice chairman and chief operating officer at Conn's Inc., a 117-year-old specialty retailer based in Beaumont, Texas, which sells appliances, electronics and furniture in 62 stores in Texas and Louisiana. "We see it as a way to allow customers to pay the loan out to maturity. It's our experience that you get a high percentage of payment."
Conn's stretches out about 2% of its loans to current status once every six months, mostly boosting 36-month loans for as long as 72 months. At the end of 2006, about 25% of Conn's total loan portfolio was extended to riskier borrowers, while the rest was to those with better credit histories. Conn's says the loss rates on both its prime and so-called secondary, or riskier, portfolio, are both just 3%. That is lower than many big credit-card issuers, which are in the 4%-to-5% range.
On Friday, Conn's shares fell 34 cents, or 1.3%, to $25.02 in 4 p.m. composite trading on the Nasdaq Stock Market, bringing its market value to almost $600 million. The share price is up about 11% since the start of the year. The stock has a relatively low valuation, trading at 13.8 times estimated 2008 per-share earnings compared with 18.2 for the broader retail sector, according to Thomson Financial.
Conn's says it hasn't seen any deterioration in any of its loan portfolio, even though it finances nearly 60% of its sales to a mix of prime and subprime customers. "There is no big housing slump going on in Texas and Louisiana right now," says Mr. Nylin.
Conn's converts its receivables into securities for sale to bond investors. But because it is a retailer and not a bank, it isn't required to follow guidelines laid out by the Federal Financial Institutions Examination Council for re-aging and recording losses on consumer loans. The council recommends that re-aging occur not more than twice in five years on a loan, and for losses on unsecured loans to be recognized if they are 180 days late. Conn's recognizes losses on its secured loans when they are 210 days late.
"There's been an increasing trend to rely on the secondary portfolio and less on the primary portfolio to drive growth," says Anthony Lebiedzinski, an analyst at Sidoti & Co., which doesn't own any shares in Conn's. Mr. Lebiedzinski has the equivalent of a "hold" rating on the stock. While Conn's does charge higher interest on the secondary portfolio, "there's also higher risk," Mr. Lebiedzinski adds.
