South Canterbury Finance Limited

[Balance]

SCF010 trading at 31% offered.

Hm.. could be worth a punt.

[Romulus]

Hi this is my first post on this thread, but I have looked at GG for SCF and the bonds are covered as long as SCF calls on the existing g'tee before Oct 2010. From an investing point of view you would want SCF to default before October 2010. Somehow it must be resolved before then because if SCF can't repay all debenture holders that have their maturity before Oct 2010, then that would trigger a default and if they can, then they must of resolved their funding issues.

[Alan3285]

SCF010 trading at 31% offered.

Hm.. could be worth a punt.

{Alan nearly falls off his chair}

I'm not so sure - they are in quite a bit of trouble. What if they make it past Oct 2010, then fall over in Nov 2010?

{Grin}


Hey, another thought: Are the RPTs covered by the govt guarantee?

Alan.

[Balance]

{Alan nearly falls off his chair}

I'm not so sure - they are in quite a bit of trouble. What if they make it past Oct 2010, then fall over in Nov 2010?

{Grin}


Hey, another thought: Are the RPTs covered by the govt guarantee?

Alan.

Exactly - that's the judgement call to be made.

[Romulus]

My understanding is because SCFHA are equity they are not covered by GG.

Note the SCF030 that mature on 8 Oct 2010 trading @ 7.6% are covered and if they are covered then any failure triggered under the GG before 8 Oct 2010 will cover all eligble debt (both debentures and bonds on any duration). Logic also would imply this is so because if SCF failed say in June 2010 then SCF030 bonds wouldn't need to wait until 8 Oct 2010 before GG kicks in, hence all bonds kick in under GG along with all debentures of any duration (Before and after 8 Oct 2010) also kick in under the GG cover.

Does that make sense!!

[minimoke]

My understanding is because SCFHA are equity they are not covered by GG.

Note the SCF030 that mature on 8 Oct 2010 trading @ 7.6% are covered and if they are covered then any failure triggered under the GG before 8 Oct 2010 will cover all eligble debt (both debentures and bonds on any duration). Logic also would imply this is so because if SCF failed say in June 2010 then SCF030 bonds wouldn't need to wait until 8 Oct 2010 before GG kicks in, hence all bonds kick in under GG along with all debentures of any duration (Before and after 8 Oct 2010) also kick in under the GG cover.

Does that make sense!!

I'm not so sure. It is the eligible deposits that are guaranteed - not SCF. I think the scenario might be that if SCF goes into recievership (a default event of some magnitude - and one of the "b - f" default events in the Deed)) pre Oct 2010 then the Trustee would say all covered deposits would come under the Guarantee - on the basis that none of them are likely to be paid. This is kind of what happend with Strata Finance but on a much smaller scale.

However if SCF defaults on an interest payment on say SCF 010 then perhaps its only those deposits that trigger the default mechanism and thus the guarantee. (thats an "a" defualt in the Deed). The trustee may look at the SCF020 and say "theres a good chance interest will be paid on those" so the guarantee doesn't apply. If the Trustee gets it wrong and interest isn't paid post Oct 1010 the default provisions apply - but only interest would be guaranteed - not the principal (assuming of course SCF is in the extended Scheme).

Again hypothetical because we haven't had a major insitution fall over. But it does again lead us to conjecture that perhaps Plan Z on SCF's table is to shuffle the deck chairs and call in the recievers pre October 2010.

[Alan3285]

But it does again lead us to conjecture that perhaps Plan Z on SCF's table is to shuffle the deck chairs and call in the recievers pre October 2010.

LOL!

Alan.

[QOH]

It's looking worse by the day, I see some SCF010 going through at 40%. I can't see much point getting out now, I'll just wait and hope. Surely there will be something left for holders eventually

[Alan3285]

It's looking worse by the day, I see some SCF010 going through at 40%. I can't see much point getting out now, I'll just wait and hope. Surely there will be something left for holders eventually

I was just about to post that myself - I am practically drooling!

I'd be very happy to take them off your hands at 40%!

Alan.

[Balance]

Written in May 2008.

http://www.timarudirectory.co.nz/new...-hubbard-tick/