However, it says "the National Business Review and the Independent have recently published misleading information about our business, we feel it is important to set the record straight on a number of the key issues."
It says it is extraordinary that there is criticism of its funding line with Fortress.
"We consider it prudent practice to have additional standby funding lines at our disposal in the event of adverse wider market conditions such as we have recently seen.
"In essence, this arrangement enables Hanover Finance to access funds by selling certain loans to a Fortress funded Special Purpose Vehicle (SPV). The funding from Fortress is secured over those loans not any assets of Hanover Finance. This alternate funding arrangement was developed in conjunction with Hanover Finance's trustee and is just another tool that Hanover Finance can use to manage its liquidity profile.
Hanover is surprised it "had the 'temerity' to pay dividends to its shareholders out of profits earned…despite this being a normal business practice."
It says the board decides what it requires in terms of cash and equity and any surplus will be distributed to its parent as a dividend.
"In 2007, following the usual assessment of capital requirements, the majority of the profits were distributed as a dividend to Hanover Financial Services Limited. The profits that were retained increased Hanover Finance's capital ratio from 10.35% to 11.41%."
It says that in the previous year all of the profits were left in the business in order to fund expansion.
Hanover defends its related party loans.
"Related party loans have always been integral to Hanover as we are both a financier of property and a property development and management company."
All loans to related parties require the approval of the board and are otherwise subject to similar loan approval processes, as loans to third parties including the taking of security where appropriate, Hanover says.
"We are mindful of continuing market feedback though and are actively looking to reduce the value of related party loans over time. This process has already begun and we will report progress during our regular accounting reporting cycle."
"It is somewhat disheartening that Hanover is being criticised for voluntarily undertaking the rigorous and expensive process of obtaining an international credit rating.
Hanover Finance's long-term rating is only a notch below investment grade at BB+, and it pays a higher interest rate, which is entirely in keeping with a slightly higher risk as perceived by the rating agency's research.
It should be noted that the key reason given by the rating agency for not according Hanover Finance an Investment Grade rating of BBB- is that the company focuses exclusively on one area of asset funding (property assets).
Hanover says the current market environment is, without doubt, extremely tough. However, Hanover Finance remains in a solid position with a well managed, profitable business backed by experienced management and shareholders.
"It is frustrating that Hanover Finance is subject to unwarranted rumours and conjecture, but that seems to be the price that comes with being one of the country's largest and most successful finance companies."
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