Deposit rate news briefs

Five Star Consumer Finance update, trustee supports changes, Credit crunch letter responses, Govt increase T-Bill tender, More Kauri Notes likely. Comment: Regulation won't save companies (or investors).

Monday, 10 September 2007

According to information supplied by the company to PricewaterhouseCoopers there are 2,145 investors are affected by the receivership, and secured debenture stock totalled $51.1 million.

Funding was sourced throughout New Zealand (75% from the Auckland, Waikato/Bay of Plenty, and Canterbury/Marlborough regions) predominantly from private investors.

As at 31 March 2007, 65% of money lent by Five Star was in the commercial sector, with the remaining 35% being lent in the retail sector. The geographical spread of where the company lent its funds was concentrated on the Auckland region.

Trustee supports changes
Perpetual Trust is endorsing the Securities Commission's proposed new rules for trustees companies which give them greater powers to identify failing finance companies.

Perpetual Trust Chief Executive Louise Edwards says under the proposed new rules, it will be able to better assess a finance company's financial position and act, if necessary.

"By giving trustees the power to appoint independent experts to report on the true financial position of the finance company at any time, and also the additional requirement for six monthly audited accounts, the Securities Commission is providing us with tools to better protect investors' interests."

Currently, trustee companies have limited ability to act on a company unless it has breached its trust deed.

Comment: Regulation won't save companies (or investors)
Talk of rushing legislation into action to avert finance company collapses is meaningless. The reality is legislation won't stop finance companies collapsing or investors losing money. [READ ON].

Credit crunch letter responses All listed structured debt issuers and building societies asked by the stock exchange for continuous disclosure statements had responded by the deadline. [MORE]

Government increases Treasury Bill tender
The Government is responding to the global credit crunch by increasing the amount of Treasury Bills for sale. [READ ON]

Kauri Notes offer gets away
Savings & Loans has closed its initial Kauri Notes offer in New Zealand to retail investors.

"In the context of the current bearish global credit market conditions, this represents a pleasing result for the initial release of a new boutique product designed to generate regular income with the benefit of 100% capital protection provided by Merrill Lynch, one of the world's leading wealth management, capital markets and advisory companies," the company says.

Savings & Loans is pleased with the demand from Financial Planners for a regular supply of capital guaranteed investments which provide continuing income to their clients. The New Zealand investment market is short of investment grade income investment alternatives, particularly while the market is volatile. Savings & Loans intends to make subsequent offers of Kauri Notes to satisfy this investment demand.

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