Loans securitisation group Rams Home Loans has dropped around $385 million in market capitalisation since its July 27 Australian Securities Exchange (ASX) listing.
Rams led the Australian market lower yesterday, falling just over 19 per cent on fears that the group's finances would be impacted by fallout from volatility in US debt markets.
Rams, which holds $14.2 billion of loans, announced that yield spreads on the company's $6.2 billion in US extendible commercial loans were materially higher than forecast.
The ASX announcement said while it was too early to determine the extent of any impact on its fiscal 2008 earnings, it could have a material impact on profit if conditions continue.
"RAMS confirms it has no sub-prime lending exposure and all of its loans are 100 per cent mortgage insured," the group's statement to the ASX said.
According to Australian Unity head of mortgages Roy Prasad, anybody within the mortgages securitisation industry will be feeling the heat.
"The extent of the train wreck is not clear to anyone yet," Prasad said.
"Anybody within the mortgages securitisation market will feel the effects of these external events impacting their business model."
The All Ords closed 45 lower at 5982.5 and the ASX/200 fell 46.8 to 5964.8.
