RB mum on who it has given exemptions too
The Reserve Bank has exempted some non-bank deposit taking firms from the requirement to get a rating - but won't name the firms.
Thursday, August 6th 2009, 10:48PM
by Paul McBeth
The Reserve Bank of New Zealand has excluded small non-bank deposit takers from requiring a credit rating as part of new prudential regulation, saying it would be unfair to enforce the regime on these companies.
Deposit takers with consolidated liabilities of less than $20 million won't need a mandatory credit rating from Fitch Ratings, Moody's Investor Services or Standard & Poor's after the central bank decided these companies represented a "a very small percentage of the total liabilities of the deposit taking sector" and that the extra costs of getting a rating was "unduly onerous and burdensome" when compared to the size of the exempted companies.
If a company is successful in its application for an exemption, it will have to "prominently state" in every prospectus, investment statement and advertisement relating to an offer of its debt that it doesn't have a credit rating and explain the terms of the exemption.
The exemption also requires exempted companies not to disclose any "assessment of its creditworthiness that is in substance a credit rating" that has been issued by an unapproved agency, such as Grosvenor Financial Services' BondWatch.
The $20 million figure is taken as an average over a 12-month period, and any liabilities owed within a group are excluded from this calculation.
Submissions on the central bank's draft rules for non-bank deposit takers closed in February and work is still continuing on the final version. The exemption comes into effect from March next year.
Paul is a staff writer for Good Returns based in Wellington.
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