NZF to renegotiate Westpac funding after Genworth downgrade

Genworth provides re-insurance for loans NZF’s subsidiary NZF Mortgages originates using the Westpac facility. Moody’s downgraded Genworth one notch from "Aa3" to "A1" last Friday and said it was on negative watch, signalling a further downgrade is likely.

Genworth also has an "AA" rating from international ratings agency Standard & Poor’s, the equivalent of Moody’s "Aa2" rating and two notches higher than Moody’s current rating, which was reaffirmed in December.

A condition of the Westpac facility was that Genworth retain a Moody’s rating at or above "Aa3" and an S&P rating at or above "AA-". Westpac has now waived that requirement for 60 days.

"The downgrade was a technical breach of the facility," says NZF Group managing director John Callaghan. "If Westpac wanted to, it could have pulled our facility and stopped us lending. They’re obviously very happy with the relationship," he says.