PSIS knocking on door of investment-grade credit rating

S&P affirmed PSIS' BB+ rating, saying the company's "low-risk and sound credit profile" underpinned the revised outlook, which gives the firm a one-in-three chance of an upgrade to BBB- over the next two years.

This comes after the collapse of the finance sector and global credit crunch sapped lenders' ability to meet their obligations, and a number of companies have had their credit ratings cut deeper into speculative, or junk, status.  

"The positive rating outlook reflects our expectations that the ratings could be raised to BBB-/A-3 if the company continues to successfully manage its low-risk and sound credit profile through to 2011, a period when the non-bank deposit taking sector in New Zealand is expected to come under pressure," said credit analyst Peter Sikora.

"The outlook could be revised to stable should there be signs that deposit support was not as strong as anticipated."