South Canterbury Finance (SCF) received more bad news yesterday, with Standard and Poors issuing its third credit rating downgrade this year.
The agency announced yesterday it had revised down SCF's long-term rating from B to CC but maintained its short-term rating at C.
It warned both its short and long-term ratings were on negative watch.
Standard and Poor's credit analyst Peter Sikora said he was reacting to a "material weakening of SCF's liquidity and cash position", beyond what had been anticipated at the last review.
This was despite some success in managing forward maturities.
He said SCF's cash balance had diminished because of delayed loan repayment, weak reinvestment and flow of new debentures.
SCF chief executive Sandy Maier said there was confidence the company would recapitalise by the August 30 deadline, and that was of more consequence to stakeholders than the credit downgrade.
The company was still covered by the Government's retail guarantee scheme, was comfortable with its liquidity and was meeting all its obligations.
