NZF sees its rating cut
Owned by the listed-NZF Group, NZF Money's rating could be downgraded further to "D," S&P says. S&P had previously rated the company "B."
"NZF's liquidity position has weakened, largely as a result of a material rise in past-due loans, compounded by some volatility in NZF's debenture reinvestment experience," S&P analyst Nico De Lange says.
Although NZF Money can meet its liquidity needs over the next few months from cashflows generated from the repayment of a number of past due loans, S&P "believes NZF's liquidity position is delicately placed," he says
"In our view, the company could run short of cash if loan repayments are not progressed as anticipated, notwithstanding that forecast loan repayments over this period are on loans where there is an unconditional sale contract in place and NZF's confidence around prospects that loans will be settled," De Lange said.
There's a one-in-two likelihood NZF's rating will be lowered again within the next three months. "Evidence of success of settlement of past due loans in the next two months could help stabilise ratings at the current level." But delays in scheduled loan repayments could lead to a downgrade.
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