Hi Rossi, I've been reading with some interest your exhortations to pressurise RBS regarding the high likelihood of the Tumours defaulting on their loan payments. I'm not sure whether that angle will actually be that profitable for us; I'm pretty sure that a bunch of sleazy, cynical city bankers-even ones possessed of demonstrable incompetence-will not have handed out a loan worth several hundred millions of pounds to a pair of well-documented degenerates and chancers without having arranged a series of judicious Credit Default Swaps or similar such instruments. (For those who don't know, it boils down to a form of de facto insurance against bad loans, at a substantial premium, but not usually with an insurance company per se; they got a terrible name during the credit crisis because of their pervasiveness in 'insuring' bad loans and highly structured, dodgy financial products, with people seeking CDS knowing full well that a loan book was likely to be full of defaults and with dodgy credit rating agencies giving out ludicrously high ratings).
If this is indeed the case, RBS will have been, and will continue to be happy to collect the whopping debt interest repayments from our loathsome yank friends (ie, revenues which should be reinvested into our club), which in and of themselves represent a very sexy profit for them once you factor in the bank's recouping of most of the initial loan outlay in the event of a default. I hope I'm wrong.
You're wrong thankfully. RBS are very far from happy about what is going on, quite the opposite in fact. The interest is now pretty much irrelevant to them, Hicks' default and the increasing pressure being brought to bear on them over the ongoing loan facility and financial mismanagement (KPMG's conclusions) mean this is a ticking time bomb for them, not least in terms of PR.
As said above, why have they been constantly trying to reduce the loan? Furthermore, why was Broughton appointed? And at whose insistence? Still doubt it? Ask yourself why their top man Hester granted an interview to local press recently commenting directly on the club's borrowings, describing them more or less as irresponsible. It's very evident that RBS just want this increasingly toxic loan paid down in full asap (via a sale), and to get back to business as usual, servicing the club's normal day to day financial needs, as they have done for years before the Tumours ever showed up.
Fact is, they are wobbling, teetering on the edge of the scary precipice that they know a leap from is necessary. They don't yet have the courage of their convictions, but they are definitely psyching themselves up, especially if they receive no concrete assurances about a sale in the next few weeks as requested. Which is why as stakeholders, we need to continue to be standing to their side, effectively shouting "JUMP! JUMP!!!!" using whatever pressure we can apply.
