South Canterbury Finance's credit rating has been maintained at BB, on credit watch negative, by international agency Standard & Poors, but its "financial profile remains weak".
S&P credit analyst Derryl D'silva said in a statement yesterday South Canterbury remained on credit watch negative because it remained exposed to debenture-refinancing pressures leading into October, when a significant level of debentures are set to mature.
"Although South Canterbury's financial profile remains weak for its BB rating, it has made some progress in improving its credit profile from when it was initially placed on credit watch negative on March 2, 2010," Mr D'silva said.
South Canterbury's chief executive, Sandy Maier, said the S&P review recognised progress made to improving the company's credit profile during the past six months, through restructuring to "strengthen its position as a viable business".
"Good progress had been made to actively manage the loan book and loan repayments from borrowers," Mr Maier said in a statement yesterday.
Mr D'Silva said "importantly" South Canterbury had improved its balance sheet liquidity and overall prospects of managing its refinancing requirements, by retaining debenture investor support and attracting new debenture inflows.
"Specifically, South Canterbury has increased its cash on balance sheet to about $100 million on the back of an average reinvestment rate of 43% over the last five months, new debenture inflows, and loan repayments," he said.
Additionally, short-term liquidity would benefit from a capital injection of $37.5 million at the end of May, he said.
