Vision put into the high risk category

Mezzanine property-development financier Vision Securities has been assigned a B rating by S&P and been put onto a negative outlook.

"Our ratings on VSL reflect its business profile as a New Zealand mezzanine property-development financier," Standard & Poor's credit analyst Peter Sikora said. "We regard this as a high-risk lending category. The ratings also reflect VSL's weak capital position, which is small and moderated by related party loans, and its concentrated loan portfolio. VSL also has a concentrated and vulnerable funding profile."

Despite this, VSL has been able to manage its business through what has been a difficult time for property-development-focused finance companies raising debentures in New Zealand. The rating also recognises our view that VSL will successfully finalise a recapitalisation transaction by the end of third-quarter (calendar) 2010, and that balance-sheet liquidity will improve with the successful relaunch of the company's debenture stock prospectus by April 2010 and with the receipt of asset-sale proceeds over the next few months.