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Standard and Poor’s has assigned a BB long term credit rating to recently restructured rural finance company PGG Wrightson Finance, which will be enough for it to be part of the government’s extended deposit guarantee scheme.

The deposit guarantee extension from October this year until the end of 2011 is only available to those non-bank deposit takers with a BB rating or better. Finance companies must have a credit rating by March 1 under the Reserve Bank’s new regulatory regime.

PGG Wrightson said it would look to increase its rating over time and was pleased with a 78% average reinvestment rate from depositers, which had increased to a high of 90% through January. PGG Wrightson offers both guaranteed and non-guaranteed deposits.
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Credit rating agency Standard and Poor’s has given the Police and Families Credit Union (PFCU) a ‘BB+’ long term credit rating, and a ‘B’ short term rating, making it the first credit union in New Zealand to have an S&P rating under the Reserve Bank’s new regime for regulating non-bank deposit takers. Both ratings have a stable outlook.

A Standard and Poor’s rating below ‘BBB-’ is widely referred to as “junk” status.

Under the RBNZ’s new regime it will be mandatory for all deposit takers to obtain a credit rating by March 2010.

“PFCU is the first credit union in New Zealand to be rated by Standard & Poor’s. We view the credit union’s sustainable business model, very good asset quality, and overall sound financial profile as strengths that underpin the ratings,” Standard & Poor’s credit analyst Gavin Gunning said.

“Further, we consider PFCU’s competitive position to be sound as it is not in direct competition with banks, unlike many community-based and regional credit unions,” Gunning said. 

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