S&P warns of more collapses

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Standard & Poor's says the recent appointment of receivers to New Zealand-based finance company National Finance 2000 (not rated) shows that parts of New Zealand's non-bank financial institutions sector exhibit high risk.

Friday, May 12th 2006, 6:23AM

"Transparency of companies in this sector remains low, with debenture holders experiencing difficulty in identifying relevant benchmarks to guide their investments," Standard & Poor's credit analyst Craig Bennett says.

"Our view remains that there are many companies in this sector that are vulnerable to a change in industry or economic conditions."

Standard & Poor's continues its research of the non-bank financial sector, especially the credit quality of its larger participants.

"We expect the larger, more diversified and better capitalized entities to survive sudden adverse economic conditions," Bennett says.

He research, together with credit ratings, play an important role in both guiding investors to better understand their investment risks and improving the general level of transparency of market participants.

"Standard & Poor's will continue to expand its analysis and opinions on finance companies, as well as commentary on the broader sector", Bennett says.

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