Standard & Poor’s lowers Broadlands Finance credit rating

Broadlands Finance has had its long-term counterparty credit rating reduced from 'B' to 'BB-/B&' by Standard & Poor's and its outlook held on negative, with ratings analyst Peter Sikora citing Broadlands "weak liquidity position, vulnerable funding profile and high-risk loan portfolio."

"In our view, Broadland's credit losses have been fairly well managed to date, but its credit profile is moderated by a high-risk loan-receivables portfolio that exhibits a material level of arrears and some single-customer concentration," Sikora said.

Over the past year Broadlands has required regular and ongoing support in the form of cash debenture investment from sole shareholder Anthony Radisich to repay external customer debenture investments heading into and post the initial retail government guarantee expiry on October 12.

While S&P said Radisich is believed to be able to provide further support, "we believe that this support is vulnerable to Broadlands being able to generate sufficient returns and value to ensure shareholder's longer term commitment."