Archive | Finance

ANZ sells pensions & investments businesses to IOOF

ANZ Banking Group Ltd said yesterday it had agreed to sell pensions & investments & aligned dealer group businesses to IOOF Holdings Ltd, and continued to review options for its life insurance business.

The latest in a succession of sales to get the bank back to mainstream business is the sale of its OnePath pensions & investments & aligned dealer groups business for $A975 million. As part of the agreement, ANZ will also enter into a 20–year strategic alliance to make available IOOF superannuation & investment products to ANZ customers.

The OnePath pensions & investments business has $A48 billion of funds under management, and the aligned dealer groups business has 7172 aligned advisors & $A19.5 billion of funds managed.

OnePath life insurance has $A1.6 billion of premiums in force, OnePath general insurance $A226 million.

ANZ said the transaction price represented a multiple of 25 times the 2017 financial year net profit after tax, equating to 17 times after separation & transaction costs. Aggregate profit for the year was $A39 million.

The bank estimated its accounting loss on sale of about $A120 million, including sale proceeds of $A975 million, separation & transaction costs of about $A300 million post-tax, and an accounting adjustment of about $A500 million for Treasury shares.

ANZ expected the transaction to increase its tier 1 capital ratio (as set out by the Australian Prudential Regulation Authority) by about 15 basis points on completion.

The bank expects the transaction to take about 12 months to complete.

The context

ANZ group executive for Wealth Australia, Alexis George, put the sale in this context: “The sale of the pensions & investments & aligned dealer groups businesses is consistent with ANZ’s strategy to create a simpler, better balanced bank focused on retail & business banking in Australia & New Zealand, and institutional banking supporting client trade & capital flows across the region. “Financial services such as superannuation, investments & advice are a core part of the support we provide ANZ customers now & in the future.

“By partnering with IOOF, we are able to create greater value for our shareholders while also providing our customers with access to quality wealth products from a specialist provider with the right cultural fit, financial strength & digital capability.

“The sale provides ANZ with greater flexibility to consider options for the life insurance business, including strategic & capital markets solutions.”

Attribution: Company release.

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Words from the bank economist on what first-homebuyers should look for

While a few spokespeople pushed in the last fortnight for Reserve Bank restrictions on home loans to be eased, in the vain hope of maintaining overall sales in a declining market, Bank of NZ chief economist Tony Alexander took a different course.

Mr Alexander suggested first-homebuyers look closely at the wording of ads for clues on how to pitch their offer.

Words such as “bargain”, “take advantage” & “motivated” sprang to mind.

He said a flick through the www.realestate.co.nz website the night before he wrote his BNZ weekly overview column showed 11,195 Auckland homes on the market, and 2766 of them – 25% – carried agents’ words warning of some distress.

What to do about it? “The time is ripe for you, first-homebuyer, to start taking advantage of their pain. Relax. Take a few breaths. Take your time. Look at a number of properties. Start throwing in lowball offers in case you catch a truly panicked fish. Alternatively, simply make an offer for what you think a place is really worth – and stick with it. Don’t let the agent work you. They know that at this point in the housing cycle the effort they need to put in is on the vendor – convincing them that the days of stupid prices have ended.”

Mr Alexander said the chances weren’t high that the Reserve Bank would ease loan:value ratio restrictions soon: “The rules were announced in August 2013. Comparing now with then, although house price inflation has slowed nationwide from 6.3% to 5%, (Auckland 11% to 2%), lending growth is higher at 7.7% from 5.2%, and imbalances clearly persist between demand & supply growth in Auckland.

“The next 12 months will bring pain for late-cycle investors hit by the 40% minimum deposit requirement for new investors, tighter bank lending rules and an oversupply now of developable land in Auckland. Many will be looking to offload an asset they now see falling in price. This then becomes the best market facing first-homebuyers for many years.”

Link: 17 August 2017, Tony Alexander, full BNZ weekly overview

Attribution: Alexander column.

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Heartland lifts profit and looks at note issue

Heartland Bank Ltd increased net profit after tax by 12% to $60.8 million for the year to June. It’s also considering making a notes issue in the next fortnight.

Chief executive Jeff Greenslade said yesterday the increase in profitability was driven primarily by growth in receivables across all divisions – household, business & rural.

Among highlights:

  • 12% increase in profitability to $60.8 million ($54.2 million in the first half of 2016)
  • Net finance receivables up 14% ($447 million) to $3.6 billion
  • 6% return on equity (11.1%)
  • Launch of multiple digital platforms
  • Implementation of new core banking system
  • Earnings/share 12c
  • Total assets up $501.7 million due to the increase in net finance receivables plus an increase in liquid investments
  • Household net receivables increased $227.8 million with reverse mortgages up $126.1 million, motor vehicle loans up $72 million and personal loans (including Harmoney) up $40 million
  • Business division net receivables increased $96.2 million and and rural $123 million
  • Net tangible assets increased from $433.5 million to $490.5 million, and from 91c to 95c/share.

Mr Greenslade said the company was considering making an offer of 5-year unsecured, unsubordinated, fixed-rate notes to institutional & New Zealand retail investors. If the offer proceeds, the company expected it to open in late August.

Link:
Annual results presentation

Attribution: Company release.

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ASB lifts profit over $1 billion

ASB Bank Ltd, a subsidiary of the Commonwealth Bank of Australia, reported statutory net profit after tax of $1.069 billion for the June year, up 17% on the previous 12 months.

Chief executive Barbara Chapman said cash net profit after tax was the preferred measure of financial performance as it presented the bank’s underlying operating results and excluded items that introduce volatility &/or one-off distortions, and weren’t considered representative of ASB’s on-going financial performance.

Results for 2017 (2016 results in brackets):

Interest income: $4.027 billion ($4.048 billion)
Interest expense: $2.176 billion ($2.286 billion)
Net interest earnings: $1.851 billion ($1.762 billion)
Total operating income: $2.386 billion ($2.226 billion)
Impairment losses on advances: $69 million ($130 million)
Net profit before tax: $1.483 billion ($1.270 billion)
Net profit after tax (statutory profit): $1.069 billion ($913 million)
Cash net profit after tax (cash profit): $1.033 billion ($914 million)
Total assets: $88.628 billion ($81.606 billion)
Advances to customers: $78.100 billion ($72.075 billion)
Return on ordinary shareholder’s equity: 17.7% (18.1%)
Return on total average assets: 1.2% (1.2%)
Total operating expenses as a percentage of total operating income: 35.8% (37.2%)

Capital ratios:
Common equity tier one capital as a percentage of total risk-weighted exposures: 10.5% (9.9%)
Tier one capital as a percentage of total risk-weighted exposures: 12.6% (12.3%)
Total capital as a percentage of total risk-weighted exposures: 14.1% (13.2%)

Link:
ASB result, NZX attachments

Attribution: Bank release.

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Construction starts on Ngai Tahu subdivision at Hobsonville Pt

Construction has started on Ngai Tahu’s innovative new residential development for Hobsonville Point that includes a number of long-term rentals.

It’s funded by the NZ Super Fund, Ngai Tahu Property Ltd & New Ground Capital Ltd.

The 208-home development on the former Defence Force base at the top of the Waitemata Harbour, announced in December 2015, was the initial step for Ngai Tahu Property into the Auckland market and is the first direct property investment for the NZ Super Fund.  First homes in the development will be on sale off the plans from September and the whole development is due to be completed by the end of 2018.

The Ngai Tahu development, now known as Kerepeti, covers 2 1ha superlot sites called Kerewhenua (111 homes) & Uku (97 homes).

The NZ Super Fund & Ngai Tahu Property are investing 48% each of the capital required for the development, and New Ground Capital is contributing the remaining 4%.

Each superlot will consist of a mix of apartments, terrace homes & walk-up apartments based on a masterplan by Context architects. They’ll be built by 4 local building companies – Classic Builders Ltd and Naylor Love Ltd (Kerewhenua) and Jalcon Homes Ltd & Haydn & Rollet Ltd (Uku).

About 50% of the 1- to 4-bedroom properties will be priced under the Auckland median house price and 30% will be priced in keeping with the Hobsonville Point affordable homes Axis programme.

About three-quarters of the homes will be available for sale as they are developed, but 47 are to be retained and made available as long-term rental properties to be managed by New Ground Capital, which was set up in 2014 to develop a long-term rental portfolio.

Anyone can apply to rent one of these homes once completed, with lease terms of up to 7 years to provide security of tenure, while still allowing leaseholders to shorten their lease should their circumstances change.

Ngai Tahu Property chief executive David Kennedy said: “The shared vision for this development was to ensure public & iwi funds are reinvested into infrastructure for the long-term benefit of New Zealanders – those who live there and the investors themselves.

“With building of terrace homes and early foundation works for the apartments now starting on both of the superlot sites, we are on the way to ensuring a broader section of the market, be they renter or homeowner, can have a quality place to live and enjoy access to all the amenities & lifestyle on offer at Hobsonville Point.

“We expect the new long-term rental properties to be listed on www.newgroundliving.co.nz in the third quarter of this year.”

Links:

Ngai Tahu Property 
www.ngaitahuproperty.co.nz
NZ Super Fund
www.nzsuperfund.co.nz
New Ground Capital
http://www.newground.co.nz
New Ground Living
www.newgroundliving.co.nz

Attribution: Company release.

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Judge told to reconsider 19 dismissed charges against Hawkins loan companies

The Commerce Commission has won its appeal against a district court decision to dismiss 19 charges against 2 finance companies controlled by former Equiticorp chief Allan Hawkins.

In the Auckland High Court, Justice Rebecca Edwards found in the commission’s favour in a judgment issued on 11 April and remitted the 19 charges back to Auckland District Court judge David Sharp for determination.

Judge Sharp found the 2 companies guilty on 106 charges last year. Dismissing the other 19, he said they concerned representations about the companies’ right to charge interest & costs on contracts entered into before 6 June 2015, following repossession & sale of borrowers’ property where Budget & Evolution had security interest over multiple items.

The commission’s case was that, for loans entered into before 6 June 2015, lenders were prohibited under the Credit (Repossession) Act from charging interest & costs after the first security item had been repossessed & sold. Budget & Evolution argued that where a loan was secured over multiple items, all items had to be repossessed & sold before they needed to stop charging interest & costs.

Budget & Evolution also appealed all 106 convictions on multiple grounds, but Justice Edwards rejected all appeals.

Mr Hawkins headed the Equiticorp finance group in the 1980s but, after the 1987 sharemarket collapse, he ended up in civil & criminal trials over the group’s activities and was sentenced to 6 years’ jail for fraud.

He formed the Cynotech group of finance companies about 12 years ago, using the shells of his 1980s companies.

Mr Hawkins’ listed company, Cynotech Holdings Ltd, was delisted in September 2013 after his private company, Cynotech Securities Ltd, acquired 71% of the shares in 2010 in a bid to fully privatise it. In July 2013, Cynotech Holdings went into liquidation after his backers ended their support.

Mr Hawkins resigned as sole director of Budget Loans on 9 July 2013 but was reappointed on 13 August 2013. He remains a director of Broadway Mortgage Custodians Ltd, Cynotech Finance Ltd & Evolution Finance Ltd, and is one of 4 directors of Budget Loans Group Ltd (renamed from Cynotech Securities Group Ltd in July 2013; in liquidation November 2013).

Link:
Commerce Commission enforcement response register, including judgments

Earlier stories:
18 July 2016: Hawkins’ finance companies guilty on loan contract enforcement
17 December 2014: Commission files criminal charges against 2 Allan Hawkins finance companies
9 November 2013: Commission tells Allan Hawkins’ finance companies to stop repossessions
11 July 2013: Cynotech share trading halted after backers end support
28 July 2010: “Welcome letter” from Hawkins’ Budget Loans to National Finance borrowers came with an illegal $15 fee

Attribution: Commission release, judgments, Companies Register.

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Australian regulator tightens interest-only lending rules

The Australian Prudential Regulation Authority initiated more supervisory measures on Friday “to reinforce sound residential mortgage lending practices in an environment of heightened risks”.

The authority has taken a series of actions this year to tighten lending, but its concern dates back to December 2014, when it directed authorised deposit-taking institutions (ADIs) to improve the quality of new mortgage lending generally and to moderate the growth of investor lending in particular.

The authority said on Friday it had advised authorised deposit-taking institutions that it expected them to:

  • limit the flow of new interest-only lending to 30% of total new residential mortgage lending, and within that:
    • place strict internal limits on the volume of interest-only lending at loan:value ratios above 80%, and
    • ensure there is strong scrutiny & justification of any instances of interest-only lending at a loan:value ratio above 90%
  • manage lending to investors in such a manner so as to comfortably remain below the previously advised benchmark of 10% growth
  • review & ensure that serviceability metrics, including interest rate & net income buffers, are set at appropriate levels for current conditions, and
  • continue to restrain lending growth in higher risk segments of the portfolio (eg, high loan:income loans, high loan:value ratio loans and loans for very long terms).

Authority chair Wayne Byres said the organisation believed the 10% benchmark for growth in lending to investors continued to provide an appropriate constraint in the current environment, balancing the need to continue to moderate new investor lending with the increasing supply of newly completed construction which must be absorbed in the year ahead.

However, he said additional supervisory measures were warranted, particularly in relation to the high level of interest-only lending – nearly 40% of the stock of residential mortgage lending by ADIs, which was quite high by international & historical standards.

“APRA views a higher proportion of interest-only lending in the current environment to be indicative of a higher risk profile. We will therefore be monitoring the share of interest-only lending within total new mortgage lending for each ADI, and will consider the need to impose additional requirements on an ADI when the proportion of new lending on interest-only terms exceeds 30% of total new mortgage lending.”

The authority has also told lenders it’s monitoring the growth in warehouse facilities they provide to other lenders, which allow the lenders to build a portfolio of loans that will eventually be securitised: “APRA would be concerned if these warehouse facilities were growing at a materially faster rate than an institution’s own housing loan portfolio, or if lending standards for loans held within warehouses are of a materially lower quality than would be consistent with industry-wide sound practices.”

Link:
Australian Prudential Regulation Authority

Attribution: APRA release.

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First NZ Capital invests in property lender Pearlfisher

Pearlfisher Capital Ltd has entered a joint venture with First NZ Capital Group Ltd which opens the smaller private property investment & development lender to new business and will add a new direction to the country’s largest full service investment bank.

Pearlfisher founders Tony Abraham & Jarrod Bruce (left & centre) with First NZ Capital head of investment banking Sam Ricketts.

Pearlfisher, started by Tony Abraham & Jarrod Bruce in 2009, has worked with a pool of high net worth investors to fund residential subdivisions, townhouse & highrise apartment projects and suburban retail developments.

It’s an asset class First NZ Capital has left alone as it’s concentrated on advisory wealth management.

First NZ Capital’s head of investment banking, Sam Ricketts, said yesterday the company saw non-bank property financing as an area of opportunities & growth, both for its own investment and as an additional offering to its institutional & high net worth client base: “The non-bank property finance market overseas is quite sophisticated & well developed,” he said.

Mr Bruce believed it was the first time in New Zealand an institution had made this step into direct non-bank property financing.

Pearlfisher has sat between that inhouse investment style and the New Zealand finance company sector model of raising money from the public through debentures, which was destroyed in the global financial crisis in 2008.

The company offers first & second mortgages, using funds from a small pool of wealthy investors. Unlike finance companies that attract funds and then have to use them or face paying high returns on low-interest bank deposits, and where investors don’t see where their money is being placed, Pearlfisher lines up a project then goes to its investors.

“We originate opportunities then decide whether we want to pursue them, and match with investors. The investors look at the specifics of that transaction. We don’t just dole out cash, but in theory we also don’t have a cap.”

Mr Ricketts said First NZ Capital had invested in the Pearlfisher business: “The benefit of that is the alignment of interest. In most transactions we’d like to think Pearlfisher would be putting their capital in as well.”

First NZ Capital had seen interest in property investment grow among high net worth individuals, and also among institutions, and Mr Bruce some of that was evident through the advent of family offices, which he saw as opportunistic. By comparison, “We’re trying to grow a long-term business.”

First NZ Capital introduces a large support base to Pearlfisher. Mr Ricketts: “I’ve got 20 guys in my investment banking team, plus the global strategic alliance with Credit Suisse, in place since 2002.”

Mr Bruce said the timing of the Pearlfisher-FNZ joint venture was good, but it wasn’t based on taking advantage of immediate opportunities. Mr Ricketts said First NZ Capital also saw long-term opportunities in the non-bank lending sector.

One early outcome should be an increase in availability of first mortgage funding. Mr Abraham: “Under the current structure, if we got a deal for $20-25 million, we’d probably struggle to place it. Most of our loans are in the $1-10 million range, but we’ll start to see larger first mortgage opportunities.”

2 reasons for that have arisen. One is the capital constraints the Australian banks are facing and the other is the tightening of credit criteria.

For investors, syndication has attracted increasingly large sums, but on a different timeframe. Syndicate managers look at investors placing their money for several years, whereas for Pearlfisher’s investors the average term is 12 months: “They recycle their capital. We’re also not selling $50,000 parcels, but $1-2 million chunks. For a $4 million deal, we’d take it from one person.”

Mr Abraham said the difference in investor markets came down primarily to market nous: “Our investors actually understand the risk profile, which has been critical to how we run our business – not everyone understands the space we play in.”

First NZ Capital will add independent governance to the mix. Mr Ricketts has joined Pearlfisher’s board and Sean Keane has been appointed as its independent chair. Mr Keane’s 30 years in financial markets locally & internationally included being managing director of global money market funding & short-term interest rate trading in Asia & the Pacific for Credit Suisse before he returned to New Zealand in 2008.

He founded Triple T Consulting Ltd, which has close ties to Credit Suisse & First NZ Capital, joined First NZ’s board in 2012 as a non-executive director, is deputy chair of NZX-listed Eroad Ltd and is a director of Foundation Life (NZ) Ltd.

Attribution: Interview.

The content of this article has been tweaked shortly after initial publication, correcting some of my terminology in particular.

 

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ANZ sells UDC Finance to Chinese HNA Group

ANZ Banking Group Ltd agreed yesterday to sell UDC Finance Ltd to the HNA Group of China for $660 million. The transaction also includes the Esanda name & trademarks in Australia & New Zealand.

ANZ said the sale was subject to closing steps & conditions, including engaging with investors on the replacement of the secured investment programme, and regulatory approvals. The bank expected to complete the sale late in the second half of 2017.

Background

Both UDC & Esanda are asset finance businesses. ANZ bought 20% of what was then United Dominions Corp Ltd from United Dominions Trust of the UK in 1965, and UDC was a listed company for the next 15 years, until ANZ privatised it. However, although UDC became a full subsidiary, it maintained its distinct identity.

Esanda Finance Ltd was a remnant of the ES&A Bank (English Scottish & Australian Bank Ltd), which ANZ merged with in 1970. ANZ sold Esanda’s dealer finance unit to Macquarie Group in 2015 for $A8.2 billion, but retained the Esanda name & trademarks.

The buyer of UDC, the HNA Group, is based on Hainan Island off the south coast of China and operates globally in the tourism, logistics & financial services sectors. One of its subsidiaries, Hainan Airlines, began a regular service of 3 flights/week between Shenzhen & Auckland on 31 December. In October, HNA agreed to buy 25% of Hilton Worldwide Holdings Inc from asset manager the Blackstone Group LP for $US6.5 billion.

HNA Group was founded on the business of Hainan Airlines Ltd in 1993 and has grown into an international conglomerate with $US90 billion of assets. Its interests include 1250 planes flying under numerous banners, HNA Capital (leasing, banking, insurance), HNA Tourism (Caissa Touristic, China’s top outbound tour operator, which runs over 240 travel agencies), HNA Hospitality Group (a range of nearly 2000 hotels in all tiers), HNA Airport Group (13 airports under management & co-operation projects, plus airport economic & industrial parks, all in China), HNA Real Estate (developing the 10,000 mu (667ha) Hainan Island cbd and the 49,000 mu (3267ha) South Sea Pearl River manmade island), HNA Retail (over 1.2 million m² of outlets) & HNA Logistics (about 60 ships, a shipbuilder, cold-chain logistics).

ANZ cleanout

ANZ New Zealand chief executive David Hisco said yesterday the UDC sale reflected a continued focus by ANZ on simplifying its business & capital efficiency.

ANZ sold its Asian retail & wealth business to DBS Bank Ltd of Singapore in November, saying it wanted to focus on running its institutional bank in the region. On 3 January, ANZ said it had agreed to sell its 20% stake in Shanghai Rural Commercial Bank to China COSCO Shipping Corp Ltd & Shanghai SinoPoland Enterprise Management Development Corp Ltd for a total $A1.838 billion, representing a price:book ratio of about 1.1 times Shanghai Rural’s net assets as at December 2015.

That sale increased ANZ’s APRA (Australian Prudential Regulation Authority) CET1 (common equity tier 1) capital ratio by about 40 basis points. The UDC sale is worth another 10 basis points from the APRA perspective, 50 basis points from the ANZ perspective.

ANZ said the sale was at a $235 million premium to net assets (as at 30 September 2016) and a price:book ratio (net assets at 30 September 2016) of 1.6 times. The bank said its net gain on the sale (after transaction costs & release of goodwill) would be $A100 million.

Links:
UDC 2016 financial statements

Earlier stories:
2 November 2016: ANZ sells Asian retail & wealth business to DBS
30 October 2016: Hainan conglomerate adds Hilton stake to its international expansion

Attribution: Bank & HNA releases.

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Moral victory only – no money – for bank clients in swaps case

High Court judge Dr Matthew Palmer issued a moral judgment on Monday in favour of a Taranaki farming couple who lost heavily in a swaps deal with the National Bank when the global financial crisis hit in 2008 – moral only, because he said the law precluded awarding damages.

The judge explained his predicament in the case of dairy farmers Craig & Lisa Swan, who borrowed $6 million from the National Bank to buy a dairy farm through their company, Cygnet Farms Ltd.

Theirs is the first of several cases brought by farmers who entered similar interest rate swaps agreements with banks a decade ago.

Justice Palmer said: “The difficulty with the outcome of this case lies in the lack of availability of damages as a remedy. Damages in tort restore the plaintiff to the position of the tort, the misrepresentation, not having occurred. Damages in contract restore the plaintiff to the position where the contract is performed on the basis the misrepresentation is true. And section 6(1)(b) of the Contractual Remedies Act provides that only contractual, not tortious, damages are available where a party to a contract has been induced to enter into it by a misrepresentation.

“This leads to an unfortunate result: (a) Liability for pre-contractual misrepresentation in contract is excluded by clause 10.1. (b) The Fair Trading Act claim is out of time. (c) Although I have found the bank liable in negligence & negligent misstatement, section 6(1)(b) of the Contractual Remedies Act precludes me from awarding Cygnet damages.”

Justice Palmer said he would send his judgment to the Law Commission to consider.

“This situation is unfortunate, given the equitable maxim ‘where there is a right there is a remedy’. But I consider that is the effect of the law. In precluding damages in negligence, for a misrepresentation inducing a party to enter a contract, Parliament created a gap in the law in 1979. The gap does not appear to have been highlighted directly by a case until now. Parliament intended the law of the contract, not torts, to govern the availability of damages. It is not clear to me Parliament appreciated the possibility that there could be no liability in contract and liability in tort, but no damages in tort. However, any change to the law must be made by Parliament.”

The Swans sought a declaration from the judge, which he delivered: “I declare that, in promoting & entering into interest rate swaps with Cygnet, the National Bank, now ANZ Bank NZ Ltd, breached the duties arising from its relationship to take reasonable care that explanations it proffered were accurate and that its replies to inquiries were correct.”

ANZ Bank NZ Ltd bought National in 2003 but retained the separate brand until 2012.

The judge said he was inclined to award costs to the Swans because they’d succeeded on liability and in obtaining declaration, if not damages, but asked for submissions from the parties on costs.

In a summary of the case, Justice Palmer said: “The bank represented to Cygnet that interest rate swaps were like a fixed rate loan but with upside & flexibility. It did not explain 3 potential downsides to swaps compared with fixed rate loans. It represented a swap was suitable for Cygnet. And it represented it would provide proactive advice to Cygnet about managing the risks & opportunities of its swaps. In January 2008, Cygnet agreed with the bank to structure a loan of nearly $4 million in the form of 2 interest rate swaps. In its contractual documentation the bank sought to exclude its liability.

“The swaps were disadvantageous for Cygnet when the GFC hit in mid-2008, since it could not take advantage of a precipitous fall in floating rates. In addition, Cygnet suffered from the swaps in a number of ways which would not have affected fixed rate loans and which it did not know about in advance:

(a) the bank imposed an additional credit limit on Cygnet in relation to the swaps, which it would not have done for a fixed rate loan, and which later affected the margin it charged Cygnet

(b) the break fees were calculated differently, and were higher, than for fixed rate loans, and

(c) the bank increased the margin it charged on the underlying loan, which it could not do on fixed rate loans.”

Attribution: Judgment.

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