Sharechat Logo

S&P lowers Geneva Finance rating

Wednesday 6th April 2011

Text too small?

Standard & Poor's Ratings Services has lowered its long-term counter-party credit rating on Geneva Finance Ltd to selective default (SD).

"The rating action follows shareholder and subordinated noteholder approval on March 31, to convert existing debt interests to equity which, in our view, constitutes a distressed exchange, considering the conversion price is higher than the current market value of shares, and noting the limited liquidity of Geneva's shares," S&P said.

An SD rating is assigned when S&P believes that the obligor has selectively defaulted on a specific issue or class of obligations but it will continue to meet its payment obligations on other issues or classes of obligations in a timely manner, according to the company's website. It includes the completion of a distressed exchange offer.

"We anticipate that the rating on Geneva will revert to a level no higher than CCC, following our further discussions with Geneva's management and our subsequent analysis of the insurer's business and financial profiles - including an evaluation of its prospects of operating as a viable entity in the future," credit analyst Peter Sikora said.

The insurer financial strength rating on Geneva's captive insurer, Quest Insurance Group Ltd (Quest), was affirmed at CC and removed from creditwatch with developing implications. A positive rating outlook has been assigned on the Quest rating.

"The rating on Quest is expected to be positioned in line with that of Geneva, given its role within the group as a captive financial insurer," Sikora said.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

Property for Industry Limited (NZX: PFI) Strong Valuation Outcome, Penrose Acquisition
3rd December 2021 Morning Report
Fonterra Shareholders Fund (NZX: FSF) Fonterra provides Milk Price, earnings and Q1 update
Kiwi Property Group Limited (NZX: KPG) Signs Sale and Purchase Agreement with IKEA
2nd December 2021 Morning Report
The New Zealand Refining Company Limited (NZX: NZR) Launches Share Purchase Plan
Seeka Limited (NZX: SEK) Confirms Market Guidance
Australia and New Zealand Banking Group Limited (NZX: ANZ) Acknowledges Class Action Proceedings
1st December 2021 Morning Report
Livestock Improvement Corporation Limited (NZX: LIC) Appoints New Chief Executive