Fisher & Paykel Finance stops offering taxpayer guarantee on deposits 6mths ahead of Crown scheme's end

Fisher & Paykel Finance, one of just four entities covered by the extended Crown retail deposit guarantee scheme, says it has stopped offering guaranteed term securities under the scheme more than six months ahead of its scheduled end.

Consumer lender F&P Finance, a subsidiary of whiteware maker Fisher & Paykel Appliances, said in an announcement today the halt was effectively immediately. However, investors with existing guaranteed debentures will continue to have the benefit of the Crown guarantee in line with its terms.

"The Crown’s guarantee served its purpose through the global financial crisis and it is now appropriate for Fisher & Paykel Finance Limited to only offer non-guaranteed term debentures to the public," said Alastair Macfarlane, managing director of F&P Finance.

“Our consistent strong financial performance and positive liquidity position has given us the confidence to make this change ahead of the expiry of the Crown’s guarantee scheme on 31 December 2011,” said Macfarlane.

"This initiative aims to reduce the uncertainty that the Crown’s Retail Deposit Guarantee Scheme creates when managing funding requirements leading up to the expiration of the guarantee on 31 December 2011."

Macfarlane said the move has the full support of F&P Finance’s banking syndicate, which includes ANZ, BNZ and Westpac.

The other companies covered by the extended Crown retail deposit guarantee scheme are the Wairarapa Building Society (which stopped offering the guarantee in January), Heartland New Zealand (the merged Marac Finance, CBS Canterbury and Southern Cross Building Society) and PGG Wrightson Finance. Heartland is currently proposing to buy PGG Wrightson Finance's good loans.

The taxpayer has been guaranteeing up to NZ$1.9 billion worth of retail deposits covered by the extended Crown retail deposit guarantee scheme. Macfarlane told last month that F&P Finance had about NZ$100 million worth of debentures due to mature before December 31. And as of March 31 F&P Finance had a total of NZ$140 million worth of debentures on issue.

F&P Finance, which delivered its parent shareholder an 18.4% return on equity in the year to March, recently reported a 20% annual rise in earnings before interest and tax to NZ$34.7 million.



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Now to see what Heartless does!