The rating agency gave the Horowhenua-based finance company a BBB- long-term corporate credit rating and an A-3 short-term rating with a stable outlook, based on Electra's "explicit and implicit support" for Oxford Finance.

"Similar to other New Zealand finance companies, funding is considered a weakness for Oxford Finance Corp. due to concerns about its ability to maintain investor confidence," said credit analyst Peter Sikora in a statement. "Such concerns are mitigated by the company's high debenture rollover rate of more than 80%, its diverse investor base and the good maturity distribution of its debenture book."

The company's $45.5 million in debenture stock is guaranteed by the parent Electra, including interest payable to security holders. The guarantee does not extend to creditors of Oxford Finance in general.

Oxford Finance focuses on motor vehicle and property finance loans in the central and lower North Island, and is also covered by the Government's deposit guarantee scheme.

It posted a net profit of $1.02 million in the year ended March 31, down from $1.47 million a year earlier, with revenue of $8.7 million, up from $8.1 million in 2008.

The Reserve Bank is due to announce a new prudential regime for non-bank deposit takers which will require finance companies to hold a credit rating from S&P, Moody's or Fitch.