Solid response sees South Canterbury extend deposit rate special
South Canterbury Finance has extended its 8.25% offer for existing debenture holders to reinvest their cash for 12-, 15- or 16-month terms after investors rallied around the troubled finance company.
Wednesday, June 30th 2010, 4:23AM
by Paul McBeth
Chairman Bill Baylis and chief executive Sandy Maier said nearly two-thirds of respondents to the offer rolled over their investments for a longer period, and helped "significantly" reduce the looming maturities when the government's initial retail deposit guarantee scheme was scheduled to end in October.
"We encourage you to take advantage of this 8.25% p.a. rate while the opportunity is available," Baylis and Maier wrote in a letter to investors. "As we are significantly reducing our ‘wall of maturities' it is likely we will revisit our interest rates on offer and adjust them downwards to meet the market as we move forward."
South Canterbury has been under intense scrutiny over the past two weeks after the government placed owner Allan Hubbard and some of his business interests under statutory management over allegations of lending irregularities.
Maier and Baylis reiterated that finance company was specifically excluded from the statutory management, and that it is still covered by the government's deposit guarantee.
They dismissed any notion that they would be hindered by statutory managers running Hubbard's affairs, saying they expect the government appointees "will act in a commercial and professional manner and will continue to support our restructuring and equity raising efforts."
Paul is a staff writer for Good Returns based in Wellington.
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