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Cymbis put on negative credit watch

Sunday 2nd of December 2007

Fitch says it has put Queensland-based Cymbis Finance Australia (CFAL) on negative watch over its B long and short-term credit ratings, on concern C+M's failure could hurt the company.

"Although domiciled in different countries, the owners of CFAL and C+M are linked and there is a degree of operational interaction between the companies," Fitch said.

"Both businesses operate similar business models in which retail deposit funds are primarily lent for relatively high-risk property development purposes."

Fitch said it expected to make a decision on Cymbis' ratings once it becomes clear how C+M's failure would affect the company and its investors.

Cymbis had reported assets of A$121m ($140m) at the end of June, and lends primarily for property development projects in Queensland.

"CFAL's ratings reflect its small size, limited trading history and the relatively high risk nature of its core lending activities," Fitch said.

C+M's trustee Perpetual Trust was looking closely at the large number of subsidiary companies.

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