KEY POINTS:
Geneva Finance has been downgraded by credit ratings agency Standard & Poor's from B+ to B-.
Standard & Poor's director Gavin Gunning said the change reflected a sense that Geneva's short-term liquidity and funding position was increasingly under pressure.
"While Geneva continues to benefit from the demonstrable support of its primary bankers, the nature and extent of potential future support has changed since Standard & Poor's previous rating action on September 10, 2007."
He said there were no new material, or immediate other concerns reflective in the rating, and said Geneva's "creditwatch" situation should be resolved within a month.
S&P moved the company's creditwatch outlook upwards to "developing" from negative a month ago, meaning the rating could change depending on the outcome of funding talks.
Geneva's sister company Quest Insurance Group was given a lowered rating of CCC+ from B-.
Geneva CEO Shaun Riley said the company continued to be prudent and said the rating decision was extremely disappointing , given that it was in talks with an offshore institution over an equity and debt funding package.
"This action is counterproductive to our efforts to prudently manage our business and maintain investor confidence," he said.
Mr Riley said the rating change was a response to market sentiment and the volatile state of the finance sector in general .
He confirmed that "like all other finance companies", Geneva had reduced its lending our costs .
"We continue to work with the Bank of Scotland and investors to meet our commitments."
- NZPA
