NZ central bank scolds Rabobank for pulling credit rating
By Paul McBeth
Sept 7 (BusinessDesk) - New Zealand's Reserve Bank sent a formal warning to the local subsidiary of Dutch agricultural lender Rabobank for briefly withdrawing its credit rating in July.
The central bank warned Rabobank New Zealand for "failing to maintain a current rating of its creditworthiness, as required under Section 80 of the (Reserve Bank) Act," according to a statement on its website. On July 11, Standard & Poor's withdrew its AA rating on a negative outlook for Rabobank NZ at the lender's request, before reinstating it a day later.
"Rabobank New Zealand Limited has acknowledged its mistake in withdrawing its credit rating, and acted promptly to remedy the situation when drawn to its attention," the central bank said. "It has committed to take remedial measures to prevent similar issues in future."
At the time of the withdrawal, Rabobank NZ told interest.co.nz the rating had been withdrawn because the group issued debt through its Rabobank Nederland NZ branch and deposits were taken through the online unit RaboDirect and guaranteed by the Dutch parent.
AA-rated Rabobank Nederland has $900 million of perpetual notes paying an annual interest rate of 3.7 percent listed on the NZX's debt market. The notes rose 0.4 percent to $79 per $100 bundle today.