About Us  |   Advertise  |   Contact Us  |   Terms & Conditions  |   RSS Feeds
deposit rates

SCF placed on CreditWatch negative

South Canterbury Finance (SCF) has been placed on CreditWatch negative by Standard & Poor's (S&P).

Monday, 21 September 2009

S&P has placed its ‘BB+' long-term rating on the New Zealand-based finance company on CreditWatch with negative implications.

This rating action follows the rating agency's concern that SCF's risk profile has increased since lowering the ratings on the company on August 13, 2009.

A CreditWatch Negative listing by S&P implies a one-in-two likelihood of the rating being lowered within the next three months.

"Our concerns centre on increasing pressure on liquidity; still-weak asset quality; and governance matters including, but not limited to, related party exposures," S&P said in a statement.

Since its rating was lowered, SCF has ceased allotting securities under its existing debenture prospectus (unrated by S&P), provided market guidance of an increase to its unaudited net after-tax loss for fiscal 2009 to $69 million, and had two of its four directors resign with pending replacements.

These negative developments have occurred against a backdrop of a major restructuring and recapitalisation initiative that SCF has said it will announce in coming weeks.

"The CreditWatch action reflects our view that, with no debenture prospectus in the public domain, SCF's funding flexibility and liquidity are undermined at the ‘BB+' rating level, at least in the short term," S&P credit analyst Derryl D'silva says.

Technically, SCF does not have access to the new and reinvested debenture funds, which reside in a trust account. This increases pressure on SCF's funding and liquidity.

Furthermore, SCF's liquidity levels are modest after the company's decision to shift its holdings of liquid assets from cash to higher-risk and higher-yield investments, and in related-party entities of uncertain credit-standing.

The company said the ‘BB+' rating continues to reflect its view that SCF's primary shareholder, Allan Hubbard, will remain committed to providing timely support to SCF if required.

Commenting is closed


Printable version


Email to a friend
Newsletter Signup

Weekly Updates including news and commentary

Today's Best Bank Rates
Rabobank 0.75
Based on a $50,000 deposit    More Rates »
Today's Top 5 Deposit Rates
NZCU Auckland 1.00 Success Saver
First Credit Union 0.75 Online Savings
Rabobank 0.75 Rabobank PremiumSaver - max rate
Heretaunga Building Society 0.60 On Call
NZCU Baywide 0.60 Success Saver
Based on a $50,000 deposit    More Rates »
Find a Rate
Show me the rates for
invested over
Use the full calculator
Cash PIE Rates
Institution Rate 30% 33%
ANZ 0.10 0.10 0.11
ASB Bank 0.15 0.16 0.17
ASB Bank 0.15 0.16 0.17
ASB Bank 0.15 0.16 0.17
ASB Bank 0.15 0.16 0.17
ASB Bank 0.15 0.16 0.17
BNZ 0.10 0.10 0.10
Heartland Bank 0.40 0.40 0.40
Kiwibank 0.05 - -
Kiwibank 0.25 - -
Nelson Building Society - - -
SBS Bank - - -
TSB Bank 0.25 0.25 0.26
Westpac 0.20 0.21 0.23
Westpac 0.05 0.05 0.05
Westpac 0.25 0.26 0.27

More »

Previous News
Latest Trends
Coming Soon

Disclaimer - Every possible effort has been made to keep the information in the tables and on this site as accurate as possible, however, neither the publisher, Tarawera Publishing, nor anyone engaged to compile the rates and this site accept any liability for inaccuracies or any loss suffered as a result. It is strongly advised that readers check loan details with providers. The full terms and conditions of this site can be found here.

© Copyright 1997-2021. Tarawera Publishing Ltd. All Rights Reserved.