BBB- stable to BBB negative outlook? You really think that will make a big difference?
SNOOPY
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The differential between ANZ term deposit interest rates and Heartland Term deposit interest rates has reduced over the last few months. So yes, I think improving credit ratings will increase Heartland profitability and hence attractiveness to investors.
Disclaimer: Shareholder in ANZ and HNZ.
Do any of our members with a banking background know what a difference the credit rating changes make to the cost of borrowing by the bank?
I think the BBB- also negative outlook as the negative outlook is industry/economy specific in this case, not company specific.
It is a step closer to BBB+, and then we are into the A's - of course it is positive. They would have just lowered their cost of funds with no corresponding decrease in what they loan out at.
Yes
It will make a BIG difference;
Lower cost of borrowing.
Means "the market" will appreciate the big progress Heartland are making.
I think brokers will be happy to recommend Heartland as they have more runs on the board.
Add to Heartland's record of achieving what they said they would do.
Good progress made in selling "legacy" property,and proceeds reinvested in good loans.
Added strength of loan book recognised.
As a investor the rerating adds to my peace of mind.
Snoopy - I agree with all of the above posters and can only add that its also about market perception.
I think people want to be dealing with a New Zealand bank that's growing stronger. Fundamentally the stock is very sound value at these level's and trading on a very undemanding 2015 PE ratio and attractive dividend yeild with ongoing growth prospects.
Well I rang Jeff Greenslade to congratulate him on the raised S&P Credit Rating.
Luckily Jeff was in a meeting,so I had the pleasure of speaking to Allison.
She was very pleased to hear from me, and will pass my comments onto Jeff Greenslade and The Chairman.
Jeff happy and says the new credit rating is a "good place to be". I am sure both Percy and Allison agree :)
Jeff also says further acquisitions are on the agenda albeit nothing firm at present !
http://www.stuff.co.nz/business/indu...-after-upgrade
Thanks for the link Iceman.
I sold a few AIA the day before yesterday,and used the money buying a few more HNZ at 89cents this morning.I think the Credit upgrade is very significant.I knew they were working on it,but the spend in which they achieved it caught me by surprise.With the fantastic acquisition of Sentinel,modest forward PE and wonderful dividend,plus Greenslade's positive comments I must say I feel we are well positioned.!! lol
Just checking guys...we're anticipating annual dividends totalling 6 cps fully imputed right ?