Heartland, PGG Wrightson agree to hock each other's products as part of the deal.

Hit by $47 million adjustment; sale of PGG Wrightson Finance imminent.

Heartland, the combined Marac Finance, CBS Canterbury, and Southern Cross Building Society, is considering launching a bond issue as part of its funding strategy.

Heartland New Zealand, which is seeking a banking license, says it has agreed to the conditional purchase of PGG Wrightson’s finance operation for an expected $100 million.

PGG Wrightson Finance has secured commitment from its banking syndicate to extend facilities for three years, past the expiry of the government guarantee scheme.

Chief executive Mark Darrow said the extension was in the form of a $100 million three-year revolving credit facility and was a major step toward extending the duration of the company’s funding.

“It is important that we lengthen our maturity profile out past the end of the end of the guarantee scheme in December 2011.”

PGG Wrightson Finance said it had lodged an application to join the Crown's extended retail deposit guarantee scheme.

The finance company received a BB rating from Standard & Poor's last month. Finance companies must have a BB rating or above to be eligible for the extension of the scheme.

After accounting adjustments and an increase of $3.1 million in provisions for impaired assets, profit after tax for the six months to December 31 was $3.3 million compared with $4.7 million in the previous corresponding period.