It has confirmed that Rapid Ratings assigned the company a B4 rating. This rating is one below “investment grade” and is equivalent to BB+ Standard & Poors.
“At a high level Bridgecorp Limited operates at a high risk end of the loans market. It has good tools to manage the risks of its business in terms of personnel and loans management skills and its business model is generally sound.
"It is however a business in transition and whilst current profitability is good it could easily be put at risk by an absence of structure, policy and procedures for internal risk management of growth and expansion offshore,” Rapid Ratings says in its non-bank finance company rating report.
On the financials side no major weaknesses were identified and the company was considered profitable.
However on the governance front the company needed to develop a formal mission statement and written company culture and values. The directors plan to do this by the end of the current financial year.
Rapid Ratings noted that all Bridgecorp's borrrowings were in the property sector and identified this as a strength and a weakness. Also it said that the company operated at the higher risk end of the market and the rates it charges reflect this.
It also noted, on the financial risk side, that there was a large loan to Bridgecorp Australia which was currently being repaid.
Bridgecorp's largest loan was $24.4 million and its impaired asset position was improving.
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