AMGO LN, Amigo Holdings PLC 7 5/8 01/15/24

Amigo Holdings Plc

Finance/Real Estate, Event Driven/Special Sit, Credit


Presented:05/03/2021
Price:£0.23
Cap:$0.17B
Current Price:£0.01
Cap:$0.00B

Presented

Date05/03/2021
Price£0.23
Market Cap$0.17B
Ent Value$0.33B
P/E RatioN/A
Book Value£0.17
Div Yield0%
Shares O/S475.33M
Ave Daily Vol17,084,665
Short IntN/A

Current

Price£0.01
Market Cap$0.00B
Amigo Holdings Plc engages in providing guarantor lending services. It lends to customers who lack a credit history or who have an impaired history and therefore have difficulty accessing credit from the traditional lending market. The company was founded in 2005 and is headquartered in Bournemouth, the United Kingdom.

​Publicly traded companies mentioned herein: Amigo Holdings PLC (AMGO LN)

Highlights

The presenter is long Amigo Holdings PLC (AMGO LN)’s 7 5/8 secured bonds trading at ~85, as well as a smaller position in its equity trading at GBp23. AMGO provides guarantor loans in the UK for subprime customers and maintains an 88% market share in the niche space. Its maximum loan length is three years, and the company charges ~50% interest rates, which is lower than the triple digit interest rate often charged to subprime borrowers since there is a guarantor. Between its ~50% interest rates, ~5% cost of financing, and relatively low charge-off rate of 7% – 8%, the company had been generating significant profits. However, AMGO has been severely impacted over the last two years by customer complaints regarding affordability of loans/underwriting standards and COVID-19, leading many investors to expect the company to go into liquidation. AMGO is now working through these issues and the presenter sees upside to both securities even in liquidation scenarios.

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Idea Discussion

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