TSX:CHW - Post Discussion
Post by
Nashville35 on Oct 27, 2021 8:40am
Buying Rifco
announced this morning. buying at discount to adjusted book of $1.65, per latest q report. $200 m lending book.
Rifco provides alternative lending for auto purchases across Canada, typically to B and C credits. net portfolio yield was 17.3 percent last q, and delinquency rate less than 3 percent (sure govt Covid relief has helped here). rates offered from 10-25 percent so realizing close to mid point. credit spread is +13 percent so cost of funds 4.5-5 percent . there are cash holdbacks and the ability to repossess cars where default has taken place so is pretty good business.
average customer age 42, with $55k income 521 credit score and avg car age 5.5 yrs as of 2019 .
another one of those businesses which has been hampered in its ability to grow by funding restraints. realized yield is very high suggests that with chw facilities and treasury manggement, rates could be lowered to expand addressable market for rifco.
looks like smart move and for just $28m cud be very accretive . first vault now rifco, likely the first couple of many...
+$20 stock by end of 2022...
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