NZF Money credit rating takes hit

File photo / Kenny Rodger

Standard & Poor's has cut the credit rating of finance company NZF Money Ltd (NZF) to CCC minus from CCC, citing liquidity concerns, and is signalling further downgrades are possible.

The company's ratings remain on creditwatch with negative implications.

"NZF's liquidity position remains delicately placed in our view, with the company's cash levels expected to be volatile and drop to very low levels through calendar 2011, absent a further cash injection into the business," Standard & Poor's credit analyst Nico de Lange said.

"Of greatest concern is that failure to progress the repayment of past-due loans could result in NZF running short of cash in calendar 2011, particularly if debenture-reinvestment experience is weak."

NZF Money is a subsidiary of NZX-listed NZF Group.

It did not have the necessary BB or above credit rating to qualify for inclusion in the Government's extended retail deposit guarantee scheme.

In March, S&P lowered the rating to CCC from B, again citing liquidity and saying the company was delicately placed. The company said then that it was disappointed at the S&P move and disputed its analysis.

- NZPA