South Canterbury Finances BB+ rating affirmed by S&P on funding progress:

Thursday 24th December 2009

South Canterbury Finance Ltd, the finance company owned by Allan Hubbard, had its BB+ credit rating affirmed by Standard & Poor’s, reflecting its access to debenture funding, new independent directors and clean financial statements.

S&P also affirmed South Canterbury’s short-term rating of B. The ratings were removed from CreditWatch Negative though the outlook is negative, S&P said.

“SCF has been able to again access the debenture-investor market; it has sourced three new independent directors to assist with the management of the company; it has been able to retain the confidence of its new private placement investors as well as its debenture investors; and its audited financial statements for fiscal 2009 have revealed nothing of concern,” credit analyst Derryl D’silva said in a statement.

Still, South Canterbury’s liquidity and asset quality were still weak for the current rating and the firm is only in the early stages of addressing concerns about related-party investments, he said.

“Our immediate concern is that SCF maintain higher liquidity, leading up to its recapitalization plans” and its failure to do so is likely to lead to a credit rating downgrade, D’silva said.

Businesswire.co.nz

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