Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Monica Keany representing Morgan Stanley. Please proceed.
Monica Keany – Morgan Stanley
Hi, good morning. I was wondering if you could talk a little bit about the renewal rate in Q4. You talked about it, I think you said it was at 39% and then you talked about the nonrenewable asset of $2 billion? Did you want some of that $2 billion to lapse, was it too expensive, or is it a fact that you are shrinking that you just simply don't need higher renewal rates? Can you just give us a little more color behind that?
Neil Schloss
Yes, I think it was probably a combination of all three of those. The latter one probably was the biggest one which was just the overall shrinkage of the balance sheet. And as I said, I think the key to that was, just before it expired, we filled it with assets. So, it’s still out there from a standpoint of holding our assets and those will liquidate over time. But that was the biggest piece because that was $2 billion of the $5.2 billion that was available for renewal.
Monica Keany – Morgan Stanley
In that $2 billion, what type of assets would that be, and are those assets that type you would not necessarily be originating anymore because it’s harder to finance?
Neil Schloss
No, I think that facility has a lot of flexibility from a standpoint of multi-assets. And I think it was just – the right thing for us to do is to let that facility expire and fill it with assets prior.
Monica Keany – Morgan Stanley
Would you anticipate that the run rate for renewals going forward is going to be in that area? Do you think it’s going to be higher? I mean, obviously environment is getting somewhat tougher, but I’m just trying to figure out, obviously the balance sheet is shrinking a good deal next year? So, the renewal rate you obviously do not need at 100%. Could you give us a sense of what on average renewal rate given what your managed receivables target is you would really need to achieve?
Peter Daniel
I think at this point, we’d rather not say.
Monica Keany – Morgan Stanley
Okay. Can you also give us a sense – I don’t know if you gave us this or not, but the 1,200 headcount, what is the total savings for that that you expect and the cash cost for that?
- To read the full transcript on Seeking Alpha, click here »
