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The contracts, or receivables, were the company's main source of income.
A sale and leaseback of property and securitisation of receivables were seen as ways to help cut debt.
In many cases, the company deliberately lent more to the facilities, many of which were owned by Mr. Poulsen, than their receivables were worth.
Net charge-offs as a percentage of year-end receivables were 7.6%, versus 10.1% for close competitor Metris Cos.
Last year Jabil's receivables increased almost twice as much as sales; and as of the latest quarter, ending in February, receivables were a lofty 44% of sales.
Similar(55)
Our receivables are unbelievable.
Unlike mortgages, however, health care receivables are a dynamic, revolving pool of cash.
The rising receivables are "a little bit of a red flag," said Edward Ketz, an accounting professor at Pennsylvania State University.
Is someone staying on top of receivables, being careful about opening new accounts and making sure the existing ones are current?
But after the current receivables are paid, WorldCom will not be able to raise money against future customer bills, executives involved in the financing said.
"They started from the other end entirely, asking how can we create CDOs, backed by mortgage-backed securities, themselves backed by collateral with barely any history, and their stress tests assumed house prices would be stable and the loans in the pools uncorrelated," says Mr Borod.Encouragingly, credit-card receivables are still being bundled and sold.
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