The canary is not looking well...

PeterR, Time to get the hell out of the mine I thinks!

I doubt investors with debentures maturing before the Oct 2010 deadline will be very worried - the government will have to pick up the tab if they hit the wall before then.

Those with exposure beyond Oct 2010 would be the ones feeling queezy as Raf's data points out.

Might a forced bailout of SCF by the govt be an event of sufficient consequence that it triggers the long awaited run on the NZ$?

Eric, do you know for sure the injection is cash???

I dont think Allan Hubbard deserves a kicking from anybody,he is putting his money in and will lose everything if the company fails.

I admire Alan Hubbard for putting in his own money. A good Southern man who grew up in an era of where you did the right thing. Not like some of those smart arse flashy crooks that seem to hang around Auckland with a leeching lifestyle living off other people. I hope things come right for him.Does he still have 100% control of the company or are some new financial wizards running the company?

rob.

You may be right in envy being a problem, but I can't see the relevance here. Denial though is a critical issue. Meanwhile, you only want constructive input while $250 million of SCF bonds fall sharply in value - a loss the holders probably find quite tangible.

How many red flags do we need after the last few years, just because Hubbard seems like a nice guy and has a lot of money dosent mean he will bail SCF out. How much of his wealth is SCF and or his other companies who he has used SCFs cash to support, i.e if push comes to shove he might not have the cash on hand or the ability to access funding when the run starts.
SCF needs to come very clean on what form the 40 million in equity is, where it has put its reserves that are freaking out the rating agencies because you "could" read between the lines and wander if it is propping up some other related entity. We need details of the underwrite and what fee he will take out of SCF for doing this.
Hubbard should do the right thing and fund his helicopters, dairy farms, apple business, shipping company etc. elsewhere. We are debenture holders and if we want to take the extra risk we will head to the sharemarket where at least we can share in any upside.
The days of using a finance company as your own private bank are over. Its an outrage and the media need to stop treating this situation with kid gloves. Why have treasury been there after a weekend meeting with John Key ?

lets give him a fair go and if he underwrites the dodgy loans then he truly is a southern man, some detail on the true villains who borrowed the dough but wont repaycould be enlightening.

Indeed ... Cant imagine Lachie McLeod will have a spare $15m to repay the advance on his worthless shares ...

Hubbard is certainly not a villian but as you say Hubbard is SCF which from a prudential sense is appalling. If you think you can have a good nights sleep because Hubbard will stand behind SCF you need to ask yourself where Hubbards wealth lies, well the vast majority of it is in SCF and the related parties SCF has leant too so therefore if SCF gets in to diffuculty where is the cash coming from to bail SCF out.
When you think about how many finance companies have fallen over that appeared to be sound how on earth can you possibly have faith in any of them. Its simple they are too thinly capitalized and the model does not work.
The investing public who have been nailed so many times now need to remove their blinkers with SCF and Hubbard, it is mad and delusional to just trust someone as they seem like a decent person, he probably is but that wont secure your debentures.
It dosent take a rocket scientist to realize his current capital structure does not work and I doubt there is a jurisdiction in the developed world which would allow not only 170 mill in related party loans but also having part of your cash buffer deposited in related parties too.

David.

Your two comments are an excellent summary of the issues with SCF.

Bernard should get you to provide a new post putting an investors perspective, and thereby providing some balance to the media statements that are the basis for this one.

I suspect there will be a lot of 'fixing' going on behind the scenes. Neither Key or the Treasury will be at all keen to see the Bank Guarantee whacked by a $1Billion plus claim off the back of SCF in trouble. They will concoct a version of what is keeping the US banks going, in the hope that this time next year some of those bad debts will have come good. A $1.4B (or whatever the sum would be) claim against the Bank Guarantee would go a long way to breaking the carefully constructed edifice that the NZ financial system is pukka. You can bet these sort of things were discussed some weeks ago when Key met Hubbard.
The real problem comes in October 2010 - if the guarantee wasnt rolled over in the case of outfits such as SCF they would presumably suffer something of a depositors exodus. If the books are still looking bad next year, what does Treasury do? Keep a zombie finance company going? (our version of too big to fail?)

I am told that there are 90 vineyards in Marlborough available for sale. I wonder if SCF has any lending involved.

The value of SCF bonds maturing after the gurantee continue to fall:
http://www.nzx.com/markets/nzdx/SCF010/price_history

If everything is fine with SCF then more transparency would help assure investors of the fact.