Rates Round Up
Provisional Finance receivership winds up; Allied raises $6.3 million; Marac extends into vehcile finance. Govt guarantee to blame for high rates.
Monday, 25 May 2009
by Paul McBeth
Provincial Finance investors to get 92% of $296m owed
Some 11,000 investors will get back 92.2 cents in the dollar over the next three years after the Christchurch-based company collapsed at the end of May 2006.
PricewaterhouseCoopers partner and Provincial receiver Maurice Noone said all of the company's assets had been realised, including a legal settlement with debt collector and credit checker Veda Advantage.
While the receiver was always confident debenture holders would get most of their money back, preference shareholders and unsecured creditors will not receive any return.
Allied Farmers raises $6.3 million, calls on underwriter
The proceeds will be used to refinance the Spiers Group acquisition, reduce debt and lift working capital.
The company has extended its $21.5 million term facility and $2.5 million overdraft to July next year.
Allied plans to split rural business into a wholly-owned subsidiary in July after the finance arm's poor performance dragged the group into a first-half loss.
Govt deposit guarantee scheme to blame for high rates, says BNZ
High premiums have forced the banks to keep rates high as offshore funding remains expensive irrespective of the debt's term.
"Funding costs remain highly elevated with premiums above 2% still having to be paid" for offshore funding, said chief economist Tony Alexander.
Concerns over the global economy at the start of the week saw rates edge down, but as optimism returned, the cost of borrowing crept back up, he said, with medium- to long-term housing rates past their multi-year lows and set to rise in a haphazard fashion.
MARAC extends into vehicle finance
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