NZ Post sees no impact on debt after S&P's lower rating outlook
The move will not affect debt on issue or create problems for financing activities.
New Zealand Post, the state-owned postal service, says Standard & Poor's move to lower the outlook on its A+ credit rating will not affect debt on issue or create any problems for its financing activities.
S&P yesterday affirmed the ratings of NZ Post and its KiwiBank subsidiary while lowering the long-term outlook to negative from stable, saying increasing economic risks in New Zealand could undermine the credit standing of KiwiBank, which makes up 70 percent of the group's earnings.
NZ Post chief financial officer Mark Yeoman says the outlook change is unlikely to affect its short-term commercial paper programme, which stands at about $30 million, and the next major credit event for the company is November 2014 call date for its $200 million of 2039 bonds
"This is not going to impact debt on issue," Mr Yeoman says. "It's not a downgrade."
The negative outlook means there is a one-in-three chance of a cut in the next two years.
S&P says while it deconsolidates KiwiBank in its credit metrics for NZ Post, it does take into account the contingent liability of NZ Post's guarantee of the bank's $12.3 billion of deposits and $1.5 billion of borrowings.
As at December 31, KiwiBank had some $1.69 billion outstanding under its debt funding programme, with the bulk comprising $601 million in its short-term euro commercial paper and $469 million in its Australian medium-term note programme.
A bank spokesman says the S&P move may have a small impact of wholesale trading but nothing of significance.
NZ Post has access to an uncalled $300 million capital facility from the government and its credit rating is supported by the "very high" likelihood of government support in the event of financial distress.
(BusinessDesk)
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NZ Post sees no impact on debt after S&P's lower rating outlook
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