South Canterbury Finance Limited

[whatsup]

SCF Pep Fref Shares down again today approx 6% not looking too great!!

[winner69]

Looking back a year or so it is the property related sectors that have increased quite markedly

Transport prob a lot to do with the helicoptors?

[Snapper]

I can't imagine govt being too happy about the prospect of SCF going down and invoking the guarantee. This could end up similar to the US bank bailout. In a NZ context is SCF too big to fail? I would say yes; it would be the death knell for the non-bank sector and unless the banks are going to fill that financing space it could knock any property recovery for six.

[winner69]

I can't imagine govt being too happy about the prospect of SCF going down and invoking the guarantee. This could end up similar to the US bank bailout. In a NZ context is SCF too big to fail? I would say yes; it would be the death knell for the non-bank sector and unless the banks are going to fill that financing space it could knock any property recovery for six.

Jeez .... talking about SCF being too big to fail ...... this country is really stuffed if this is the case

Unlikely anyway because Allan says he will front up with any losses

[whatsup]

When you go through the SCF "book" just how many of those "industries " would you "invest" in if the seperate parts of that "book" were floated on the share market?

[Misc]

Good point 'WhatsUp' . SCF have the same systemic issues that caused the likes of Hanover to collapse. Even worse now they have borrowed hundreds of millions from investors at high rates which they cannot lend out due to the lack of secure investment opportunities at high rates. Therefore they are bleeding cash in all directions.
The 2012 bonds being traded at 17.50% today and the prefs at 37.5c tell you that many investors think the chance of survival is not great.
And who would disagree with the company refusing to come clean about the real losses in the loan book.

Misc

[Balance]

Jeez .... talking about SCF being too big to fail ...... this country is really stuffed if this is the case

Unlikely anyway because Allan says he will front up with any losses

Relax. Kiwibank will take over SCF and become a bigger NZ bank. Depositors will be protected.

Person to lose is Hubbard but that's how it works, isn't it? You make the wrong decisions, grow too fast and lend to the wrong borrowers.

The finance companies were promoting unproductive property speculation to the detriment of the productive sector anyway. Why would them being out of the scene be a bad thing?

[whatsup]

Bal...., Why would the Govt Bank risk its shareholders $ers in buying a co that IMHO could realistly realise .40-.60 in the $ in a fire sale?

[Balance]

Bal...., Why would the Govt Bank risk its shareholders $ers in buying a co that IMHO could realistly realise .40-.60 in the $ in a fire sale?

Because this financially illiterate government has already guaranteed the debt of SCF to Nov 2010.

Plus, do you really think John Key and Bill English know what they are doing? They guaranteed the debts of just about all finance companies standing, including Mascot!

[macduffy]

Because this financially illiterate government has already guaranteed the debt of SCF to Nov 2010.

Plus, do you really think John Key and Bill English know what they are doing? They guaranteed the debts of just about all finance companies standing, including Mascot!

Now, isn't that a bit unfair, Balance?

Cast our minds back. The Australian and New Zealand govts were guaranteeing bank deposits to ensure that the system didn't collapse through a loss of confidence. Not to extend that guarantee to finance companies would have meant the certain end to their ability to raise funds and fini for the lot of them, and their depositors.
Of course, there are still big problems to work out between now and the end of October, 2010. or to extend the guarantee.