NZF Group in talks with potential partner
Financial services company NZF Group is suspending new home loan lending while it talks to a potential new business partner.
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Budget 25
Financial services company NZF Group is suspending new home loan lending while it talks to a potential new business partner.
The negotiations were subject to due diligence and a confidentiality agreement. While the talks continued NZF's home loans division had suspended all new originations, the company said.
On January 26 the company sent letters to holders of $20 million worth of NZF Group capital notes setting out their options for when the notes mature on March 15.
NZF Group elected not to redeem the notes for cash when they mature.
Noteholders can renew the capital notes at a lower interest rate for five more years, or else NZF Group will compulsorily redeem the capital notes by issuing new ordinary shares in NZF to the noteholders.
The new interest rate for investors who renew the notes will be 6 % a year, compared to 9.75 % for the current notes.
Explaining the lower interest rate for the renewed capital notes, NZF said that when the notes were issued the official cash rate (OCR) was 7.25 %, meaning the rate set of 9.75 % was 2.5 % above the OCR.
The rate for the renewed notes had been set at 6 % to remain competitive, and recognised the OCR was now 3 % and not expected to change to any great degree in the short to medium term.
The notes trade on the secondary market and therefore can be sold for cash.
NZPA and NBR staff
Thu, 03 Feb 2011
Thu, 03 Feb 2011
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NZF Group in talks with potential partner
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