Mr. Gokhale: I would say it's the broader definition. I cover commercial finance companies as well within the specialty finance sector, so really non-bank lending would be the broader category. That includes consumer and commercial finance companies, most of which are not banks.
TWST: How did that space perform through the first half of the year, relative to
what you had anticipated?
Mr. Gokhale: Most of the non-bank financial entities are very reliant on the
wholesale funding markets. They are reliant on the securitization markets and
they are reliant on the issuance of unsecured debt. Because of a lot of the
government actions taken to stabilize the financial system, such as the TALF
that was launched to help the securitization market, you are seeing decreased
funding costs in the wholesale funding markets. As a result of that, I think the
share prices of many of these companies are well off of their lows, in many
cases, doubling or tripling. The fundamental outlook has brightened somewhat for
most of the companies, again, given primarily the improvement in the funding
situation. So we are far from normal, but still things appear to be moving in
the right direction.
Tickers included in this excerpt: ACP, ADVNB, CIT, CSE, NEWS, SLM
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