Rating good enough for guarantee scheme

PGG Wrightson Finance and Fisher & Paykel Finance have been issued with BB credit ratings with a "stable outlook" by Standard & Poor's.

Finance companies must have a rating of BB or above to gain entry to the extended Crown Retail Deposit Guarantee Scheme. However, a BB rating falls short of investment grade, which is BBB or above.

Standard & Poor's credit analyst Gavin Gunning said the rating of PGG Wrightson Finance reflected the company's exposure to the agricultural sector, which was riskier than other sectors and its "higher - albeit reducing - counterparty concentration risk".

"Nonetheless, these weaknesses are offset by the company's good brand in New Zealand's rural finance services market," he said.

Standard & Poor's said any upward rating movement for PGG Wrightson Finance was unlikely in the near term.

Fisher & Paykel Appliances Holdings' chairman Ralph Waters said the company was pleased with the rating as it confirmed the "solid position" of Fisher & Paykel Finance as public issuer of retail debentures, and meant the company could join the extended guarantee scheme.

Alastair Macfarlane, managing director of Fisher & Paykel Finance, said the BB rating provided a sound platform for the business to continue offering investment opportunities to its retail investors.

- NZPA