S&P take a wait and see approach to South Canterbury

South Canterbury has been pulled under the new umbrella of Southbury Corp, along with Hubbard's Helicopters NZ and Scales Corporation, and received a $27.5 million injection after the parent company raised capital through a private placement to institutional and private investors.

S&P primary credit analyst Derryl D'silva told www.depositrates.co.nz the capital raising was one of the first steps for the company to get off its negative outlook, which gives it a one-in-three chance of being downgraded from its current sub-investment grade BB+.

"The money was pushed into the finance company, making it directly available for debenture holders," D'silva said. "There's negative pressure around the company's liquidity, asset quality and related-party investments" and these need to be addressed before the negative outlook can be removed, he said.

S&P removed its creditwatch negative rating last month after the company announced it would undergo a major restructure and lodged a new prospectus to take on new deposits. Hubabrd appointed Sandy Maier to head up his Southbury Group and South Canterbury Finance to affect change over the coming year.