10 companies sent NZX `credit crunch' letter respond in time

By NZPA

Friday 7th September 2007

All listed structured debt issuers and building societies asked by the stock exchange for continuous disclosure statements had responded by the deadline of 9am today.

NZX wrote on Tuesday, asking the 10 companies to confirm that they were complying with their continuous disclosure obligations.

NZX said that while it did not have specific cause to be concerned that companies were not complying, the letter provided an opportunity to the issuers to provide information to the market and demonstrate they were complying with their disclosure obligations.

"You will be aware of the recent international market volatility stemming from troubles in the sub-prime mortgage market in the United States," the NZX letter said.

"There has been speculation of a widespread credit crunch affecting the financial sector and potential for debt instrument default. The events should give cause for reflection," NZX said.

"Given the current environment, NZX is writing to issuers of listed structured debt. This provides such issuers an opportunity to demonstrate transparency about the effects of the international economic situation on their securities."

Last month, NZX wrote to 15 listed finance companies, following the receivership of Nathans Finance, giving those firms an opportunity to provide information to the market and demonstrate they were complying with continuous disclosure rules.

That flushed out trouble at NZAX-listed Property Finance Group which subsequently went into receivership.

The Securities Commission also last month asked 67 finance companies to confirm their current prospectuses complied with the law and were not false or misleading.

All except one did so, the exception being Five Star Consumer Finance which also went in receivership.

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