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S&P raises Geneva Finance rating

Standard&Poor's has raised its long term rating on Geneva Finance after Geneva was successful in securing debenture investors' approval and banker support.On Monday Geneva investors agreed to support an extended repayment plan, after Geneva reached a

NZPA
Wed, 31 Mar 2010

Standard&Poor's has raised its long term rating on Geneva Finance after Geneva was successful in securing debenture investors' approval and banker support.

On Monday Geneva investors agreed to support an extended repayment plan, after Geneva reached a deal with the Bank of Scotland, which has been its main wholesale lender.

Yesterday S&P initially lowered Geneva's long term credit rating, while removing the company from creditwatch negative, then a few hours later raised the rating.

In the second note, S&P lifted Geneva's rating from SD, which means a company has selectively defaulted on some obligations, to CCC with a negative outlook.

S&P said the CCC rating reflected its view that Geneva had a marginal liquidity position, which was expected to help it meet its immediate principal and interest repayment in full and on time under its new arrangement.

But there was significant uncertainty about Geneva's future liquidity position, with the company's liquidity still depending on favourable business, financial, and economic conditions, S&P said.

Geneva's management had carefully overseen operations, cash flows, and banker relationships since initially being placed into moratorium -- and had compared favourably with other finance company peers that were also placed in moratorium -- but a return to profitability was yet to be proven.

NZPA
Wed, 31 Mar 2010
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S&P raises Geneva Finance rating
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