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Rates Round Up

Propertyfinance Group in the dark on recoverability of outstanding loans; Interest payments on Fidelity bonds deferred again; SCF board paving the way for Hubbard successor; ABN AMRO ups ante in five- and nine-month TD space.

Monday, August 3rd 2009, 7:45AM

Propertyfinance Group in the dark on recoverability of outstanding loans
Propertyfinance Group, the parent of propertyfinance securities Ltd., will not know the recoverability of its outstanding debtors and debt notes "for a number of years".

The finance company posted a $19.9 million loss for the year ended March 31, as its revenue slumped 31%, including some $16.6 million of impaired assets.

PFG held a second moratorium meeting last month after its subsidiary, which owes around $79 million to investors, failed to meet a $15.5 million payment in full. As a result of the meeting, $12.3 million of interest was forgiven, but the extra income will not be accounted for until next financial year.

Interest payments on Fidelity bonds deferred again
Interest payments on Fidelity Guaranteed Capital Bonds, the NZX-listed security, have been deferred until at least January next year after it again failed to meet the threshold required to pay its 9.25% coupon.

The deferred payments are themselves accruing interest, but unlike the bond's $75 million maturity value on July 15 2013, they are not guaranteed.

The value of the fund needs to rise to around $80 million to make the January payment, or $87.5 million to repay arrears and interest. At June 30, it had a value of $73.5 million, up from $68.5 million at March 20.

SCFinance board paving the way for Hubbard successor
South Canterbury Finance is paving the way the way for life after chairman Alan Hubbard, with a succession plan expected to take shape by Christmas.

The company is working on initiatives to replace Hubbard when he retires, and is keeping ratings agency Standard & Poor's abreast of the situation. S&P placed the Timaru-based finance company on creditwatch negative, giving it a one-in-two chance of losing its investment grade rating in the next three months.

Hubbard's backing has underpinned the BBB- rating, and the chairman recently stumped up $40 million of new capital for the finance company, as well as agreeing to underwrite any further impaired loans.

ABN AMRO ups ante in five- and nine-month TD space
ABN AMRO has upped the ante in the five- and nine-month term deposit space, hiking rates for those periods while cutting back in the quarterly and half-year terms.

The company boosted five-month terms 130 basis points for deposits over $20,000, 130 points for $50,000, and 160 points for $100,000, while boosting nine-month terms 140 points, 135 points, and 155 points respectively. It cut six month periods 100 points, 110 points and 100 points for the same values, and six-month terms 120 points, 100 points and 75 points. Deposits of $5,000 were boosted 75 points for three-month terms, and 100 points for five-, six, and nine-month periods.

Westpac was another big mover in the TD market, boosting its rates on three-month terms by 15 basis points, and lifting five-month periods by 10 points.


« Rates Round UpRecovery of collapsed finance company books starts »

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