Smiths City reaps savings with switch to ANZ from F&P Finance

Christchurch-based retailer ends 30-year relationship by signing up to a $75m senior revolving secured facility.

Smiths City Group, the Christchurch-based retailer, has reaped some 400 basis points of savings on its credit facilities by switching to Australia & New Zealand Banking Group from Fisher & Paykel Finance, ending a 30-year relationship.

Smiths City has signed up to a $75 million senior revolving secured facility with ANZ for its wholly owned customer credit subsidiary Smithcorp Finance, it says in a statement.

Based on current interest rates, the ANZ facility will cost about 6 percent, while the F&P Finance arrangement, including all fees and margins, exceeded 10 percent and was forecast to rise to 11 percent next year, it says.

The retailer will incur break fees in the current year of $1.4 million from the early termination of the F&P Finance facility and will require it to provide an equity injection of $6 million to its finance unit.

"There will be substantial benefit in future years from lower costs. However, we were disappointed to have to incur in the current year break fees," chairman Craig Boyce says.

Shares of Smiths City last traded at 58 cents and have declined 3.3 percent this year.


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