FE Investment made some upward adjustments to the rate it is offering for terms up to one year and deposits over $5,000. At 10% for a one-year term, the finance company is now offering the highest rate in the market.

FE Investments guarantee expires on October 12 and it has no access to the extended guarantee.

An analysis of FE's March 2010 financial statements show about 78% of the debentures were due for maturity in the next six months on an undiscounted cash flow basis.

It isn't clear what proportion of those maturing debentures were extended. Total debentures as of March stood at $8.8 million.

The company's auditors said the financial statements were prepared on a going concern basis but the validity of that view was dependent on the company successfully replacing any reduction in debenture funding. It has noted that termination of the guarantee scheme could result in lower reinvestment by existing debenture holders with a consequential effect on liquidity.

In the year ended March, FE Investments made a net loss of $3.5 million, sharply higher than a loss of $580,350 incurred the year before. The sharp surge in loss was a result of $1.9 million of provision for impairments made in the latest year in addition to $0.7 million of write off of bad debts. 

The increase in provision reflects the very poor quality of the company's asset book. Total impaired assets stood at $5.6 million, up from $3.1 million the year before while provision for impaired assets rose to $3.1 million from $1.2 million.

The company's receivables net of impairment provisions were at $9.7 million which means gross impaired assets were at a whopping 44% of the gross finance assets.

FE's lending risks are highly concentrated with nearly two-thirds of the total finance receivables lent to the six largest borrowers.