Hon Jim Anderton

Member of Parliament for Wigram
Progressive Leader

Kiwibank will get downgraded if sold, says credit rating agency

27 May 2010 Media Statement

Mums and Dads borrowing to buy their own home will pay more mortgage interest if the government doesn't stop talking about selling Kiwibank.

That's what Progressive Wigram MP Jim Anderton says will happen after confirmation from credit ratings agency Standard & Poors that it would downgrade Kiwibank if it is sold.

Standard & Poors said "the current ratings on Kiwibank are equalized with the bank's wholly government-owned parent New Zealand Post Ltd. ...The ratings on the bank get a significant uplift from the bank's stand-alone credit profile due to an unconditional and irrevocable guarantee from the parent. Consequently, any change in the bank's ownership--which would likely be accompanied by a dilution in the parent guarantee--would be a possible trigger for rating review."

Jim Anderton says this means that if Bill English and John Key don't rule out selling Kiwibank, it will be downgraded.

"A downgrade makes Kiwibank's cost of borrowing more expensive, which means Mums and Dads pay more to borrow to buy a home.

"The Government's asset sales program is the worst feature of this year's Budget, and it’s about to cost costing Kiwi families money.

“What is there about the almost universally negative publicity following Bill English’s speculative comments about the sale of Kiwibank that this government does not understand?” says Jim Anderton.

ENDS

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