Allied Nationwide rating cut deeper due to covenant breach: S&P

Standard & Poor's director financial institutions Peter Sikora said Allied Nationwide's weak cash inflows and slower than expected asset sales and recapitalisation efforts would have caused its credit rating to be cut.

"The rating would've been lowered in any case, stemming from the cash balance reduction and lower-than-anticipated reinvestment rates," Sikora said in a podcast.

Sikora said the firm needs to remedy its trust breach first and foremost, and said he understands the parent company, Allied Farmers, was looking to inject "a small level of new capital."

To restore its credit rating, it needs repayments on its loan book to come in on schedule, and retain support from debenture holders.