In an 8-K filing on Friday, December 19, 2008, My Rich Uncle indicated that the delinquency rates on their prime and pre-prime private student loan portfolios had exceeded their covenants in their loan agreements.
Here are the details as outlined in their 8-K:
- "...the prime private student loan pool slightly exceeded the annualized default rate for loans in repayment permitted under the terms of the DZ Facility (2.3% actual versus a limit of 2.0%); the 2.3% annualized default rate was caused by the default of 3 loans."
- "...the PrePrime student loan pool exceeded the permitted delinquency ratios (19.7% actual versus a limit of 18.0% for delinquencies greater than 30 days for loans in repayment and 14.85% actual versus a limit of 12.0%, for delinquencies greater than 60 days for loans in repayment).
As a result of this covenant violation, "The Company and DZ Bank continue to negotiate in good faith a waiver for the Event of Default."
The company also announced the departure of a board member, C. David Bushley and their General Counsel, Yariv Katz in this announcement.
MRU stock price is trading at $0.05/share today (December 22, 2008).