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UDC looks to grow its loan book

UDC does deal with Ford and Mazda, Details of BNZ's 10-year subordinated bond offer and Strategic to issue perpetual preference shares.

Monday, June 11th 2007, 5:40AM
UDC Finance has been appointed the preferred wholesale and retail finance supplier for Ford New Zealand and Mazda New Zealand. As part of this arrangement, UDC will provide consumer car loan capabilities to Ford and Mazda dealerships in New Zealand.

Seventy years in the asset finance sector in New Zealand and a focus on automotive finance has put UDC in exactly the right position to take up this partnership opportunity UDC Chairman David Hisco says.

“Our proposition has recently been greatly enhanced by the recently launched “UDC Live” product which is an online ‘real-time’ car loan processing capability available through dealerships, which creates the engine for dealer-originated loans,” says Hisco.

Standard & Poor's says that UDC’s AA counterparty credit ratings remains unchanged following this deal. As part of this deal, existing wholesale financing from both dealers will be transferred to UDC.

“Following three years of decline in UDC’s loan book, this decision is aimed at strengthening UDC’s ability to grow its loan book and to avoid losing market share to smaller and more aggressive competitors,” S&P says.

Standard & Poor’s does not expect UDC’s credit risk profile to deteriorate with this acquisition, given it will finance mainly the new-car segment, which is regarded to be of lesser risk than the second-hand car segment.

Strategic's perpetual pref share offer

Strategic Finance is seeking up to $50 million in perpetual preference shares, with parent company Allco HIT acting as guarantor.

The minimum subscription is $5,000, with $1,000 units after that.

The shares will be perpetual, non-voting securities with an imputed dividend rate reset annually at a fixed margin above the one-year swap rate. The minimum first dividend rate will be 10.70% with a margin of 2.50% annually.

The proceeds from the share sale will be used to create a platform of further growth within the core business as well as expanding and diversifying the business.

Details of BNZ's subordinated bond offer
Bank of New Zealand has released details of its 10-year Subordinated Bonds issue (BNZ080).

It is raising up to $300 million, with the option to accept unlimited oversubscriptions at its discretion.

The offer opened on June 1 and closes on June 12. The interest rate: The minimum investment amount per tranche is $10,000 and in multiples of $1,000 thereafter.

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