Fisher & Paykel Finance sees securitisation revival
Fisher & Paykel Finance has experienced a revival in demand in the securitisation market in recent months, although it still isn't back to pre-crisis levels, says managing director Alastair Macfarlane.
Wednesday, December 1st 2010, 9:52PM
by Jenny Ruth
The company relied on securitisation for 36%, or $207 million, of its total external funding, or debt, of $575 million in the six months ended September 30, down from 40.8% in the same six months a year earlier.
In addition it had unutilised securitisation capacity of $78 million at September 30. Fisher & Paykel Finance's commercial paper program has an "A1+" credit rating from Standard & Poor's.
The securitisation market dried up completely during the global financial crisis.
"Over the last 12 months we've started to see far greater investment appetite," Macfarlane says. "We're starting to see significantly over-bid positions when we go to the market with tenders, although it's not of the same magnitude as it was in the boom times," he says.
"It's a very reliable source of funding for us," Macfarlane says adding that the "A1+" rating, "the highest you can get on commercial paper," helps.
"It tends to attract banks and big institutions who will quite comfortably carry an investment in that funding vehicle."
The company's securitisation program is 100% backed by bank funding.
In addition, Fisher & Paykel Finance was 37%, or $214 million, funded by banks in the six months and had $154 million in retail debentures outstanding at September 30.
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