Sharechat Logo

Spencer family's Equitable Mortgages latest to get downgrade

Friday 20th August 2010

Text too small?

The Spencer family's finance unit, Equitable Mortgages, is the latest in a flurry of credit rating downgrades announced today. 

Allied Nationwide was also downgraded to a D credit rating after it defaulted, and South Canterbury Finance fell two notches to CC. The downgrades were all announced by Standard & Poor's, one of the credit rating agencies. 

Equitable Mortgages has been downgraded to BB- over its poor asset quality and inability to deal with late repayments.  

S&P cut the financier's rating one notch, saying its arrears are above its level of comfort for a BB rating, along with a softer commercial property market, a lack of financing alternatives, and low property investor confidence, all adding to repayment pressures.

The rating has a negative outlook.  

"The ratings action reflects Equitable's poor asset quality and its failure to resolve arrears as promptly as we anticipated," credit analyst Mark Legge said in a statement.

"This has undermined earnings performance and put some pressure on liquidity."  

The downgrade comes on the same day S&P cut South Canterbury Finance deeper into junk territory as the deadline for its recapitalisation plan looms, while Allied Nationwide Finance, a unit of Allied Farmers, was sent to the receivers after it defaulted on a payment to debenture holders.  

In March, Equitable was accepted into the government's extended retail deposit guarantee earlier this year when it had the required BB rating. Only four non-bank deposit takers have been accepted into the scheme.  

S&P said Eequitable has kept adequate liquidity to meet its needs over the next three months as the initial guarantee expires, and has a reinvestment rate holding up at 55%. 

Businesswire.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

VCT - Operational performance for the year ended 30 June 2024
Challenge to banks the way to go
Bigger returns or lower risk?
NPH - Director Appointment
July 19th Morning Report
Wellington International Airport Ltd (“WIA040”) - Maturity
Devon Funds Morning Note - 18 July 2024
CNU - Commerce Commission releases draft Price Quality decision
Precinct FY24 Annual Results and Webcast Details
Scott Technology appoints new CEO