Non-bank lender RAMS Home Loans Group (RHG) announced today that it has executed documentation to extend a $750 million funding facility that had been due to expire on December 31.
The $750 million funding comprised a $500 million facility to May 2 and a $250 million facility to Jan. 31.
Late last month RAMS announced both facilities fully drawn.
RAMS, Australia's emblematic victim of the US subprime crisis, has been frantically trying to refinance debt after it failed to roll over $6.17 billion in August, when credit markets dried up and killed its main funding source.
Like other non-bank lenders, RAMS borrowed money in the short-term commercial paper market which it lent to home buyers for a longer duration. The outcome was inevitable: when that short-term funding dried up, RAMS was in the red.
The mortgage lender is currently seeking to refinance a $5.5 billion loan book funded from U.S. extendable commercial paper (XCP) markets that were hit hard by the subprime mortgage crisis.
RAMS agreed in October to sell its brand and distribution business to Westpac (ASX: ? for A$140 million and announced today that it is continuing to seek funding solutions for the rest of its XCP program.
At 12:30PM AEST shares in RAMS were up by 0.5 cents to 27.5 cents, down markedly on the initial public offer price of $2.50 in July 2007.
