22 Sep 2009

Ratings agency warning to South Canterbury Finance

3:27 pm on 22 September 2009

Standard and Poor's has placed South Canterbury Finance on notice, saying its BB+ rating may be downgraded if the company's lack of liquidity is not addressed soon.

The credit rating agency downgraded South Canterbury Finance's rating last month.

The finance company is raising capital to shore up its balance sheet after posting a $69 million loss, but stopped the process shortly after the downgrade.

Standard and Poor's says a new prospectus is needed to help fund the firm, as it describes its current liquidity position as modest.

The agency warns company's rating may be lowered one or more notches if the prospectus is not in place by the end of the month.