Vonage, EchoStar do Their Own Subprime Borrowing

In one area at least, subprime mortgages are still thriving.

Footnoted.org searched for mentions of “subprime” in one form or another in the latest crop of quarterly 10-Q filings with the SEC, and discovered 1,227 instances. That is more than four times the volume of the same period in 2006, and almost double the frequency just three months earlier.

The “S” word used to be invoked just by real estate and mortgage companies. Now it’s used by everyone from Wall Street firms to communications companies to chocolate producers.

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Footnoted points to some “subprime borrowing” recently by two decidedly non-financial companies: Vonage and EchoStar. Vonage, the Internet phone company, told shareholders the credit crisis could harm any efforts to shore up its liquidity should they be needed. EchoStar tied the mortgage morass more directly to demand for its satellite-TV service. The companies join Hershey, which caught the “subprime flu” earlier.

It’s easy to see the allure. If an investor buys that this is what is harming companies’ results, he may be willing to look beyond the present crisis. If not, the dog that ate their homework may wind up in the doghouse.