Amigo - comment

Amigo will cease operations after the board has called time on the capital raise. The £50m SSNs had been slated to be redeemed by May, and replaced with bank lines. Amigo’s statement makes no mention of whether it will still redeem the bonds early. Redemption makes sense as it will remove the coupon and administration cost. If not redeemed, the coupon would continue to be paid until the wind down is complete, expected within twelve months. The SSNs are significantly over-collateralised. Amigo has £170m in cash after making a £37m payment to the scheme in February and receiving back the restricted cash as it is going into wind-down. Scheme creditors will have to await the final liquidation to receive their compensation. Delinquencies will rise in the remaining loans as borrowers see Amigo is to be liquidated.