HGH - Heartland Group Holdings

[Beagle]

I'll bet you a decent dinner and drinks there's no heartland upgrade this year Percy and I'll give you 2:1 odds

[percy]

I'll bet you a decent dinner and drinks there's no heartland upgrade this year Percy and I'll give you 2:1 odds

Well I really think The RBNZ reducing HNZ's capital requirements was in fact a Credit upgrade.

[iceman]

The Sea Dragon loan.
Can't see the sale of their plant being easy or profitable to sell, should HNZ end up with it.

I read somewhere that there were person guarantees included for the Sea Dragon loan. Can't remember where I read it though.

[Xerof]

belted galloway astutely pointed to the facts:

Also regarding security:

"Although the Group relies primarily on the integrity of borrowers and their ability to make contracted repayments, the Group also requires appropriate collateral for loans. This collateral is usually by way of first charge over the asset financed and usually includes personal guarantees from borrowers and business owners."

Yep BG, it's all there if you look. And if you picked up the phone and spoke to any one of their rural lending people, or even better, one of the Credit Approval team, you'd find out it's all fairly straight-forward. First charge on the actual asset (which might get them 40% in a fire-sale), then tackle the owner via PG's, which would usually include a GSA over other assets (boats, jet ski's, holiday houses etc), plus sometimes specific security over assets such as their own home (usually 2nd or 3rd Mortgage)

At the end of the day, banks are there to support businesses through the cycles, not to bankrupt them at the first sign of cash-flow problems

percy, I side with roger re credit ratings to the extent they are unlikely to get an upgrade in the current environment, so would sub-underwrite rogers 2 to 1 for him if you wanted to take up his side-bet.

Having said that, my opinion of rating agencies is well documented, and I think the market holds the same sanguine view. It only possibly matters and has some immediate effect when a rating transitions to or from investment grade. That causes the funds to make moves in or out, but I don't think the general public gives a monkeys toss

[percy]

Thanks Xerof.
I am more than happy that RBNZ reduced HNZ's capital requirements,so am unconcerned whether Fitch's upgrade or not.
Although..........The statement HNZ were "assessing capital management options" would not have been made without thought of Fitch's view/reaction/consultation.

[winner69]

Yep BG, it's all there if you look. And if you picked up the phone and spoke to any one of their rural lending people, or even better, one of the Credit Approval team, you'd find out it's all fairly straight-forward. First charge on the actual asset (which might get them 40% in a fire-sale), then tackle the owner via PG's, which would usually include a GSA over other assets (boats, jet ski's, holiday houses etc), plus sometimes specific security over assets such as their own home (usually 2nd or 3rd Mortgage)

At the end of the day, banks are there to support businesses through the cycles, not to bankrupt them at the first sign of cash-flow problems

percy, I side with roger re credit ratings to the extent they are unlikely to get an upgrade in the current environment, so would sub-underwrite rogers 2 to 1 for him if you wanted to take up his side-bet.

Having said that, my opinion of rating agencies is well documented, and I think the market holds the same sanguine view. It only possibly matters and has some immediate effect when a rating transitions to or from investment grade. That causes the funds to make moves in or out, but I don't think the general public gives a monkeys toss

They may get money eventually but won't the P&L (earnings) take a hit when the loan turns 'bad' under all the guidelines they report on they assess impairment/provision of doubtful and bad debts

[Xerof]

They may get money eventually but won't the P&L (earnings) take a hit when the loan turns 'bad' under all the guidelines they report on they assess impairment/provision of doubtful and bad debts

Yes, but to a large degree, it is already 'built-in' as banks carry non-specific provisions across the entire portfolio, so unless there is a complete meltdown and a very large number of loans turn ugly, (beyond what their security would retrieve) then it just flows from general provision to specific provision

[Xerof]

Winner, but in saying that, it isn't all beer and skittles of course. A significant amount of the loan assessment procedures tend (or they did before GFC with finance companies) to rely on the account manager 'knowing their client' and doing an 'honest' review.

[winner69]

Bugger posted this on the wrong HNZ thread

See Jeff et al got a good bonus last year ...balance paid out in shares today

Deserves every cent eh ....yeah right

[vorno]

Bugger posted this on the wrong HNZ thread

See Jeff et al got a good bonus last year ...balance paid out in shares today

Deserves every cent eh ....yeah right

I could buy a shoe-box apartment for the price of that bonus!