SCF sweetens rate for current investors

South Canterbury Finance tries to get its investors to go for longer date maturities, while PGG Wrightson encourages investors to roll their 12 month deposits.

Monday, 3 May 2010

by Paul McBeth

PGG Wrightson Finance is asking PWF020 bondholders to roll-over their investment into a 12-month term deposit instead of taking the repayment of their principal on May 20. The finance company is offering to pay 7%, and investors will be covered by the government's extended retail deposit guarantee.

That came in a week where BNZ cut its six-month rate 20 basis points for $10,000 deposits and $20,000 bonds, and Kiwibank lifted its six-month rate by 80 points, while cutting its 12-month term by 15 points.

Meanwhile South Canterbury Finance is making an offer to existing SCF secured debenture stock investors to reinvest in new longer-dated SCF secured debenture stock at an enhanced interest rate.

"SCF wishes to smooth and extend the maturity profile of its current debenture book, which has been affected by the existing Crown deposit guarantee scheme, and is proactively addressing a large volume of debentures that mature before the existing Crown deposit guarantee scheme expires on 12 October 2010.

"Acceptance into the extended Crown deposit guarantee scheme means SCF is able to offer attractive longer-term Crown guaranteed investments out to 31 December 2011," the company says in a letter to investors.

Existing investors will be paid interest at 8.00%, plus a loyalty bonus of an additional 0.25%, from the maturity date an investor's existing investment until the maturity date of the new longer dated investment.

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