RAMS Share price shorn -The Age, August 14th

I noticed that RAMS has been mentioned on this forum recently.
I found this very interesting and thought this may interest some forumites. 
Will there be a flow on affect to all of us with IPs and applying for finance/loans etc..?

See whole article below or click on the link direct;
http://www.theage.com.au/news/business/rams-share-price-shorn/2007/08/14/1186857471732.html

The global credit crunch has hit Australia's mortgage belt with Rams Home Loans admitting it could face financial trouble.

In a sign of the growing global impact of the US credit market troubles, Rams said in a statement that the current volatility in international credit markets could have a material impact on its finances.The market smashed the company's share price after the news was announced. Shares which listed just weeks ago at $2.50 each dropped more than 23 per cent to $1.33 by 1.39pm, equating to about 45 per cent of its value being shed in less than 3 weeks.Rams said it was too early to determine the extent of any impact on its fiscal 2008 earnings, but it could be material if current market conditions continue.Today's announcement comes a day after Credit Suisse, one of two firms rating the stock, lifted its call to 'outperform' from 'neutral' –  rating Rams as stock to buy.Rams is not the only company facing a buffetting from the global financial turbulence."Companies like Rams are heavily dependent on what's happening in the credit markets, and a major global event like this one is going to hurt," 452 Capital's Peter Morgan told Bloomberg today."Rams won't be the last Australian company to feel it, and you can multiply it by 100 overseas," he said. Other financial stocks to fall include Australian Wealth Management, down 7 per cent or 17 cents to $2.27, and Allco Finance Group which gave up 41 cents, or more than 4 per cent,  to $9.01.The big banks were also lower, dragging the benchmark ASX 200 down 0.5 per cent in recent trade.Commonwealth Bank had given up 77 cents, or 1.4 per cent, to $53.83, NAB was 56 cents, or 1.4 per cent, lower at $38.67, ANZ dropped 27 cents, or 0.9 per cent, to $28.32 and Westpac was down 33 cents, or 1.3 per cent, to $25.81.St George Bank was 75 cents, or 2.2 per cent, lower  to $33.66 and Bendigo Bank followed the trend, dropping 14 cents, or 0.9 per cent, to $15.81."Given the current level of volatility in the global debt markets, the directors believe that it is premature to determine with certainty the extent of the likely negative financial impact on Rams for FY2008," Rams said."However, it current market conditions continue it is likely to be material.""The directors will continue to monitor the impact of credit market volatility on Rams' funding programs and will continue to keep the market informed," it added.Rams said it has three primary sources of funding – wholesale transactions with financiers, residential mortgage-backed securities (RMBS) in the Australian, European and US debt markets and extendible commercial paper deals.At August 10, its loan book was $14.16 billion, with $3.92 billion funded by warehouse transactions, $4.07 billion in RMBS and $6.17 billion is US commercial paper."Rams settlement volumes continue to be strong and in line with prospectus forecasts," it said."Rams confirms it has no sub-prime lending exposure and all of its loans are 100 per cent mortgage insured."It noted that the extendible US commercial paper market had been experiencing "unprecedented disruptions" in recent weeks."Despite these difficult conditions, Rams has continued to successfully place its short term extendible commercial paper, albeit at spreads that are materially higher than forecast," it said."Rams continues to evaluate its options for existing and future funding arrangements."

Rams' comments take the number of Australian institutions affected by the global credit squeeze to four.Earlier this month, Macquarie Bank flagged losses of up to 25 per cent in its two debt funds, while two hedge funds, Basis Capital and Absolute Capital, suspended withdrawals to avoid a firesale of assets.Macquarie Bank shares were down 0.4 per cent at $71.25 – down about 28 per cent from their all time of $98.64 reached in late May.Upheaval in global credit markets has sliced Rams shares price by 40 per cent in since its listing on July 27.A rival mortgage lender, Liberty Financial, has reportedly scrapped plans to float.Rams' initial public offer raised about $700 million through a sale of shares at $2.50 each.with AgenciesRams said it has three primary sources of funding – wholesale transactions with financiers, residential mortgage-backed securities (RMBS) in the Australian, European and US debt markets and extendible commercial paper deals.At August 10, its loan book was $14.16 billion, with $3.92 billion funded by warehouse transactions, $4.07 billion in RMBS and $6.17 billion is US commercial paper."Rams settlement volumes continue to be strong and in line with prospectus forecasts," it said."Rams confirms it has no sub-prime lending exposure and all of its loans are 100 per cent mortgage insured."It noted that the extendible US commercial paper market had been experiencing "unprecedented disruptions" in recent weeks."Despite these difficult conditions, Rams has continued to successfully place its short term extendible commercial paper, albeit at spreads that are materially higher than forecast," it said."Rams continues to evaluate its options for existing and future funding arrangements."

Rams' comments take the number of Australian institutions affected by the global credit squeeze to four.Earlier this month, Macquarie Bank flagged losses of up to 25 per cent in its two debt funds, while two hedge funds, Basis Capital and Absolute Capital, suspended withdrawals to avoid a firesale of assets.Macquarie Bank shares were down 0.4 per cent at $71.25 – down about 28 per cent from their all time of $98.64 reached in late May.Upheaval in global credit markets has sliced Rams shares price by 40 per cent in since its listing on July 27.A rival mortgage lender, Liberty Financial, has reportedly scrapped plans to float.Rams' initial public offer raised about $700 million through a sale of shares at $2.50 each.