Amigo Loans Company Profile 2020 – Expect c. 206 million customer recourse costs and lifelong capital default rate c. 33% –


DUBLIN – ()–The “Amigo Loans: Expect Approximately £ 206M customer recourse costs and a lifetime capital loss rate of approximately 33%” Company profile was added to to offer.

Why read

  • Understand how Amigo’s total cost of legal protection / handling of Amigo’s FOS Customer Complaints / FCA VReq, Amigo Specific FCA Investigation and FCA Multi-Company Survey of the Surety Loan Sector at c. 206 m

  • Understand how we estimate Amigo’s gross credit loss on Q3 20 Stage 1 to be 33%

  • Understand how Amigo’s securitization facility works and the strong loan return and expediting rights it benefits from, making the 7,625 1/2024 Senior Secured Notes (SSNs) heavily subordinated here (unless Amigo is immediate enough to manage one)

  • Understand how we can turn our estimated run-off cash flows into a base case recovery for Amigo’s SSNs of 37 cents, with a liability management exercise that may improve that to 44 cents

  • Familiarize yourself with the games SSN holders may be able to follow to rank their position against customer recourse claims and possibly against the securitization facility’s putback rights

  • Understand why Amigo’s SSNs can have value when they drop below 30 cents

  • Understand why none of Non-Standard Finance, Provident Financial, or New Day Amigo are likely to take over in the near future

  • Understand Richmond Group’s / Mr Bennamor’s likely current views on Amigo / the UK loan guarantee market and what possible games it could make after selling its stake in Amigo to zero

  • Understand why we believe it will ultimately be Amigo’s top-up / repeat lending that will bring about its downfall, both in terms of potential FCA actions beyond the current FOS order / FCA Vreq and in terms of deferred ones Asset quality problems

  • Understand why Amigo’s historical financial metrics, whether viewed as a company or a bank, including stable FCF assuming a constant loan book, have been flawed as an indicator of the company’s strength

  • Comparison between Amigo and Non-Standard Finance (UKs No. 1 and No. 2 of guarantors)

What’s new

  • Estimated total cost of customer legal protection / conduct

  • Estimated lifetime credit losses in Amigo’s loan book as part of run-off cash flow modeling

  • Analysis of the securitization facility

  • Credit loss analysis for Amigo after the global financial crisis

Questions answered

  • What does Amigo’s COVID-19 forbearance and funding position disclosure after Q3 20 mean for the current level of arrears?

  • How important was repeated lending to mask unaffordable loans (from the borrower’s / guarantor’s point of view) and to inflate Amigo’s historical profitability and steady state FCF?

  • What can we learn from the Brighthouse and Wonga cases with regard to the cost potential of customer recourse costs at Amigo?

  • What should SSN holders do to protect their position against client recourse and putback rights of the securitization facility?

  • How severe could credit losses be for Amigo given its COVID-19 forbearance program (and the FCA forbearance requirements now extending through October 20th), weak macros, current lack of repeat lending, otherwise issues with the quality of Could Disguise Assets, End Deliberate Defaults? with borrowers and guarantors and less liquidity in the UK, the surety loan market (which would otherwise allow some refinancing from borrowers) with non-standard financing currently in breach of its own securitization facility covenants?

Key issues covered

  1. View, variant perception & recommendations

  2. Historical financial performance

  3. Financial forecasts

  4. Evaluation & sensitivity analysis

  5. Yildirim stake sale & IPO potential

  6. Stress test CMA CGM

  7. CMA CGM’s previous debt restructuring

  8. Business and industry overview

Mentioned companies

  • Amigo

  • Non-standard finance

  • Richmond Group

  • Hellhaus

  • Wonga

  • Forward-looking finances

  • New day

Further information on this company profile can be found at


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