Washington Mutual WAHUQ Trust Prf (fka WAHUQ)

[Rumble]

You are correct in a couple of points.

1.) Yes, WMIH is not liable for notes beyond the value of WMMRC.
2.) Yes, WMMRC is saving lots of cash by paying in notes.
3.) If WMMRC never generates enough cash the notes may not be paid off in the future.

However, WMIH is not saving cash per se; WMIH will never get anything from WMMRC if the notes are not paid in full.

Also, as I keep an eye on the balance sheet of WMMRC I still believe there to be enough assets to pay off the notes in time. How much time I have no idea. WMMRC is still in run-off mode and is not generating new business. So unless or until all contracts are either sold off (as the ones earlier) or the contracts are cancelled (due to mortgages being paid off) then we wait.

Since 13% is a very high interest rate for any going concern I'm quite confident that WMIH won't be utilizing WMMRC as a business asset until the notes are redeemed. I have seen plenty that anticipate the WMIH will reap a return of value from WMMRC due to the value of their holdings and insurance contracts (from increase in underlying asset values) having increased since the original values were placed on WMMRC. And I fall in this camp as well.

Which means I'm still fully confident that all RONs will be redeemed in the course of time. And I'm perfectly happy to earn 13% as long as WMIH and WMMRC want to pay me.