sharetrader
Page 39 of 62 FirstFirst ... 2935363738394041424349 ... LastLast
Results 381 to 390 of 618
  1. #381
    Guru Xerof's Avatar
    Join Date
    Mar 2005
    Posts
    3,005

    Default

    the figures S and P will be seeing will be VERY current - by the time companies get into this rating category, they are reporting cashflow weekly, and most likely daily to their Trustee

    Secondly, the worst thing a Company can do is miss self-imposed deadlines - credibility is vital for confidence - confidence is vital for debenture retention rates. You would think by now that new debenture money for NZF has completely dried up

    this is already on the slippery slope, lets see what S and P report in a months time.......

    time is running out for good news

  2. #382
    Senior Member
    Join Date
    Jun 2004
    Location
    , , .
    Posts
    1,045

    Default

    I think the credit rating agencies are very risk adverse, following their "asleep that the wheel" behaviour from about 2006 to 2009. Only when the depth of the financial crisis was apparent did they tighten up standards.

    Having said this, I welcome an accurate assessment of the risks. NZF Money, one of the divisions of the NZF Group probably warrants the CCC- rating.

    The purpose of finding the financial partner is to wean NZF Money off retail debenture funding. The purpose of downsizing the NZF Money loan book is to wean NZF Money off retail debenture funding. The purpose of disposing of Finance Direct was to take pressure off the NZF Money dependence on retail debenture funding. I sense a pattern developing ....

    If NZF were in denial of the problem, I would be deeply concerned. They are clearly addressing the matter and apparently have a number of "irons in the fire".

    The delays to announcing the new partner amounts to bad news, in strategic terms. They keep saying that there are two parties still involved ... this has got to buy some confidence that a deal will happen.

    If they have to tap the shareholders for extra equity ... this is probably the "last resort", but it remains as a viable option.
    Do not consider my postings as investment advice. I am here to share research and to speculate on what might be. The boundary between fact and conjecture might not always be clear - best to treat all comments as speculation.

  3. #383
    Member Tony Two Gloves's Avatar
    Join Date
    Feb 2011
    Location
    Auckland
    Posts
    301

    Default

    I agree with Xerof the info will be at a minimum weekly and everyone will be keeping a very close watch on NZF with good reason.

    Having a little knowledge of one of the parties involved..... NZF are in an extremely poor position and will pretty much have to accept a deal on whatever terms either of the two suitors will offer if in deed they do offer a deal. The vultures are circling and the deal isn't going to be good news IMHO for anybody except either of the two parties. Did NZF really believe they were in a good position to negotiate? They really should have identified the need to change about three years ago, as Enumerate eludes to Debenture Funding is deceased for small finance companies, even more so if you are rated -CCC. Their attempt to hold on whilst admiral has been fool hardy.
    Last edited by Tony Two Gloves; 10-05-2011 at 02:42 PM.

  4. #384
    Member
    Join Date
    Jun 2010
    Location
    Auckland
    Posts
    121

    Default

    TTG, someone on this blog speculated awhile back as to why NZF Home loans are not lending currently, my understanding under the new regulations for securitised lending is that there has to be "over-collateralisation" (see below), I am advised that this requires the lender to put in about 5% of their own cash for each loan, that will be why they are not lending and require a new financial partner who wants to get into the securitisation market, NZ is ripe for that right now so I believe it will be a win win for the partners!

    "- Provision of credit enhancement

    To make the securities issued by the special purpose vehicle attractive to investors and to enable funding to be obtained at favourable interest rates, it is necessary to ensure that there is little risk of investors losing money. Usually this is achieved by provision of one or more credit enhancements. A credit enhancement is simply an arrangement which provides protection against credit risk (ie the risk that borrowers will not repay the funds borrowed). Normally credit enhancements will cover losses up to a level which is several times the level recorded historically, so that the likelihood of any loss for investors is very low. Commonly used credit enhancements include the following:

    third party insurance;
    over-collateralisation - this occurs when the face value of the loans held by the special purpose vehicle exceeds the value of the securities it has issued;
    issuing subordinated securities - holders of the subordinated securities take most or all of the credit risk on the loans because they receive payment only after other security holders have been paid;
    a guarantee from a third party;
    the bank being obliged to take back non-performing loans;
    a one-off gift to the special purpose vehicle to provide a buffer against which losses can be written off."

  5. #385
    Member
    Join Date
    Jun 2010
    Location
    Auckland
    Posts
    121

    Default

    Xerof, not sure where you get your information from, S&P ratings on finance companies run in cycles, they admit this themselves, "In reality, it takes some time to complete the analysis of new developments, so rating adjustments may not follow
    instantaneously after a change in underlying creditworthiness".

    B) Time and Standard & Poor's rating system
    32. Standard & Poor's strives to make ratings timely. That means that at any point in time, we want our rating to reflect
    a current view—including the impact of relevant forecasts and projections—about the creditworthiness of the
    subject issuer (or issue). Thus, if an issuer's creditworthiness changes (either in the sense of its current situation or in
    the sense of its future prospects), we want our rating to adjust quickly to reflect the full magnitude of that change. In
    reality, it takes some time to complete the analysis of new developments, so rating adjustments may not follow
    instantaneously after a change in underlying creditworthiness. However, when the rating adjustment occurs,
    Standard & Poor's intends for it to reflect our current opinion of the full underlying change in creditworthiness.
    Thus, Standard & Poor's intends for the behavior of a rating over time to closely mirror the behavior of its subject
    credit.

    Quote Originally Posted by Xerof View Post
    the figures S and P will be seeing will be VERY current - by the time companies get into this rating category, they are reporting cashflow weekly, and most likely daily to their Trustee

    Secondly, the worst thing a Company can do is miss self-imposed deadlines - credibility is vital for confidence - confidence is vital for debenture retention rates. You would think by now that new debenture money for NZF has completely dried up

    this is already on the slippery slope, lets see what S and P report in a months time.......

    time is running out for good news
    B) Time and Standard & Poor's rating system
    32. Standard & Poor's strives to make ratings timely. That means that at any point in time, we want our rating to reflect
    a current view—including the impact of relevant forecasts and projections—about the creditworthiness of the
    subject issuer (or issue). Thus, if an issuer's creditworthiness changes (either in the sense of its current situation or in
    the sense of its future prospects), we want our rating to adjust quickly to reflect the full magnitude of that change. In
    reality, it takes some time to complete the analysis of new developments, so rating adjustments may not follow
    instantaneously after a change in underlying creditworthiness. However, when the rating adjustment occurs,
    Standard & Poor's intends for it to reflect our current opinion of the full underlying change in creditworthiness.
    Thus, Standard & Poor's intends for the behavior of a rating over time to closely mirror the behavior of its subject
    credit.
    1. Credit stability versus rating stability
    33. Some market participants argue that stability of ratings is desirable and, therefore, that when a credit suffers severe

  6. #386
    Senior Member
    Join Date
    Jun 2004
    Location
    , , .
    Posts
    1,045

    Default

    The fact of the matter is that there is good business to be written, and the distinct probability that it will get better. NZF Money is geared up and ready to go. If a partner chooses to use the rating downgrade to apply pressure to do a better deal ... scrape 'em off ... they have revealed their true colours and a long term deal, with them, is not possible.

    NZF Group could probably do what the banks do and get funding by reactivating a version of the carry trade. Thinking outside the box, lets say you used an offshore bank and packaged up AAA insured RMBG securities, denominated in NZ$ ... this would be a goer.

    Internationally, the dark days of the liquidity squeeze are gone. If some pathetic turkeys in NZ think they can get leverage ... scrape 'em off. Worst case, go to the shareholders ... I'd do my bit.

    (I wonder if S&P know they are going to lose the rating contract once NZF shut down the retail debenture funding and they are simply taking a worst case view to minimise their assessment risk?)
    Do not consider my postings as investment advice. I am here to share research and to speculate on what might be. The boundary between fact and conjecture might not always be clear - best to treat all comments as speculation.

  7. #387
    Member
    Join Date
    Jun 2010
    Location
    Auckland
    Posts
    121

    Default

    S&P advised them months ago that another downgrade was eminate, like I say, they look at historic information and make forecasts!

  8. #388
    Guru Xerof's Avatar
    Join Date
    Mar 2005
    Posts
    3,005

    Default

    I cannot speak for NZF's particular situation, but I stick by my comments on S&P process.

    Interesting to see S&P are also seeking some comfort going forward on 're-establishing business viability'

    I guess that means they don't currently consider their business model to be viable?

    I see the first bond trade has gone through on the darkside, and s/p has lost ground today

    1 in 2 - lay your bets people

    Also a bit surprised to see they haven't pulled the Prospectus for updating - where is the Trustee - asleep at the wheel again?

  9. #389
    Member Tony Two Gloves's Avatar
    Join Date
    Feb 2011
    Location
    Auckland
    Posts
    301

    Default

    You are correct on the S&P process their info would have been at 30/04/11 - they did hint to further downgrades and they were correct to do so. They make a comment regarding viability and again they are correct to do so. In their current format NZF is not a viable business, they simply can't lend as they do not have available cash and they will not have through the remainder of 2011 as per S&P. I don't think S&P would be concerned at all about losing NZF as a client, as would their Auditors or Trustee. I seriously cannot believe the optimism around NZF that some of the people on here have. This company is hanging on by a slender thread, Shares trading at 0.023 today, the bond value has been decimated and all the promises made by themselves (which they did not have to make) have yet to be deivered and in my opinion won't be. The fat lady is warming her tonsils up and just about to break into song.....

  10. #390
    Guru Xerof's Avatar
    Join Date
    Mar 2005
    Posts
    3,005

    Default

    Whooh, taken both gloves off there Tony, ready for a fist fight?

    Can anyone answer my question posted some time ago now - when does the Westpac facility expire? I guess I'll find out when they announce their results at end of the month

Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •