Strategic Finance reaffirmed as B1 credit rating
06 December 2004
Strategic Finance reaffirmed as B1 credit rating by Rapid Ratings
Strategic Finance Limited (SFL) has received a further B1 credit rating by international corporate ratings agency Rapid Ratings.
A B1 credit rating indicates that the company is operating at between 75 – 80% of its potential. With respect to the risk of non-payment of corporate debts and/or the degree of risk of insolvency, the company is a moderate to low risk and somewhat subject to fluctuations in market conditions.
A Credit Rating of B1 also suggests that the business of SFL is very good quality and that the company is investment grade.
This is the third rating of SFL by Rapid Ratings. The rating remains in place until November 2005 unless there is a material change in the company.
In addition, Rapid Ratings has assigned a B1 credit rating to the debenture stock issued by SFL.
2004 was a year of strong financial performance by SFL. Revenue growth has averaged 50% p.a. over the past three years, resulting in sustained asset and profitability growth. SFL has sound processes and policies to manage its loan book, which are being regularly reviewed and updated. The portfolio is of sound quality but is of short duration, with high levels of concentration in second mortgage lending, predominately in the Auckland region. SFL has eliminated all related party lending. Taking into account the size of the company, SFL has very high governance standards. These standards include very good levels of accountability, transparency and performance measurement. The company has a strong board with broad experience and a senior management team with significant industry experience.
This credit rating is based on a combination of (1) a software-based quantitative rating of B1 derived from running the financials of SFL through Rapid Ratings’ web-based global corporate credit rating service and (2) an extensive qualitative credit assessment process. The additional assessment undertaken during the qualitative credit assessment supported the quantitative rating result. Thus, the qualitative performance of the company matches its financial performance and position.
Rapid Ratings has offices in Wellington, Brisbane, Sydney, Singapore, Toronto and New York and rates companies in NZ, Australia, Singapore, Canada and the US, and the UK and provides ratings on about 15,000 listed companies.
*For comparisons with ratings systems of other agencies, see tables 1 and 2 below.
Note to editors: The non-bank finance sector is a NZ$15 billion industry in New Zealand, but the industry has lacked robust, independent performance measurement. Concern about the lack of independent, professional rating of non-bank finance companies lead a group of financial planners and institutional investors in 2001 to invite Rapid Ratings to become involved in the industry. There are currently four New Zealand finance companies which have publicised the ratings issued by Rapid Ratings. In addition a number of other non-bank finance companies have, or are in the process of being rated. For private institutional clients Rapid Ratings has rated in excess of 100 companies in New Zealand and 1200 companies in Australia.
© All rights reserved 2004. This report and its methodologies are the exclusive property of Rapid Ratings. No copies may be made without written authorisation.