On 29th November I started a Poll on what readers think the resolution of the Credit Watch will be, and I let the Poll close on the weekend. I was pleased to have a total of 43 votes. Here are the results:
As you can see a substantial number of readers showed confidence that South Canterbury Finance would have its credit rating affirmed at BB+, with many others seeing it downgraded to between B- and B+.
Thanks for everyone who voted in the Poll.
7 comments:
Hi David,
Just out of morbid curiosity, how many voted for SCF to get a rating increase?
No one, I didn't include an option for an upgrade, as it is on creditwatch negative, and as S&P stated:
'Even if SCF is able to satisfactorily address negative rating pressures, at best—after the CreditWatch is resolved—it is likely the rating could be affirmed with a negative outlook reflecting near-term pressures on SCF’s financial profile, and medium-term uncertainty concerning restructuring and recapitalization initiatives. Negative rating pressures are not likely to ease until SCF can address liquidity, asset quality, and governance concerns.'
CFO gone http://www.nzx.com/markets/NZDX/SCF010/announcements/3183805/Resignation-of-Graeme-Brown
Well, sounds a more positive spin on that story than the 'run outta gas' line when the CEO left. Maybe it is a coincidence he's leaving (just) before the credit watch negative is resolved, or maybe its not. I guess we'll find out in time.
Have you seen the price the prefs have now reached? They have traded over 50c not so long ago, more than doubling investors money since they were at 23c in Sep 2009 (or thereabouts).
Yields now around 11% I think.
SCF prefs have been one of the best returns on the market in the last few months.
Yes, I have noticed that SCF preferred shares and bonds have recovered from the extreme gloom, but they are still not a picture of confidence in SCF's prospects. I think it is fair to say they are still 'distressed' but not as much as before. At 50c in the dollar, preferred shares are still saying something like SCF has as much chance of failure as recovery. Expect prices / yields to move when the Credit Watch is resolved.
Well I was wrong about the movements in prices/yields post resolution of the credit watch. The preference shares have recently gone back down to around 30c.
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