Strategic gets strong support for shares

Deposit Rates News Briefs: Strategic increases preference share offer, General Finance posts good result, Money flow into bank TDs slows, BNZ issues bonds and PPCS in breach of banking covenants.

Monday, 18 June 2007

Strategic sought to raise $40 million through the offer which has a minimum first dividend of 10.70%. The preference shares are perpetual, non-voting securities offering a fully imputed dividend rate which will be reset annually at a fixed margin of 2.50% above a benchmark rate, being the prevailing one year swap rate.

It says “firm allocation applications were received in excess of $40 million, and on the basis of this strong interest, Strategic Finance intends to exercise its $10 million oversubscription option and accept further firm allocations. To the extent oversubscriptions are not allocated on a firm basis, a public pool will be available for members of the public and Strategic Finance's investor base.”

General Finance results out
General Finance has released its annual results for the year ending March 31 and they show an audited pre-tax profit of $702,909, up from $473,555 on the year before.

Total assets (excluding funds under management) increased from $8.34 million to $10.12 million. “All lending continues to be on a secured first and second mortgage basis over residential property,” the company says.

“General Finance's aim is to grow its book carefully by offering borrowers a range of short term bridging type products. It also wants to give depositors comfort that they are funding a well run company with a clearly defined policy of lending just on residential property assets.”

Money flows to bank TDs slow
The significant inflow into bank deposits that was experienced for much of last year slowed last quarter, Spicers says.

During the nine months to December, the inflow totalled a record $8.7bill as banks benefited from the negative publicity surrounding finance companies. In comparison, the inflow in the March quarter was $1.6 bill.

Its household savings indicators show that the rate of growth in debt outpaced growth in asset values, both during the March quarter and during the year. During the March quarter, assets rose 3.0%, while debt levels rose 3.7%.

During the year to March, assets rose 11.0%, while debt levels rose 13.6%.

BNZ issues bonds at 8.42%
The Bank of New Zealand has joined the NZDX market with the issue of $350 million of unsecured subordinated bonds. The money raised will be used to meet ongoing funding requirements.

The bonds have an interest rate of 8.42% and will pay interest twice a year with the first payment due on December 15.

Bonds hold steady after PPCS says in breach of banking covenants
PPCS's three-year bond yields, which have risen as high as 20% last week, were steady on 19% Friday after the meat company said it was in breach of banking covenants [Read On]

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