Archive | PGG Wrightson

PGG Wrightson Finance offers guaranteed & excluded investments, 6 institutions opt out of guarantee scheme

Published 3 January 2010

PGG Wrightson Finance Ltd became the first finance company to offer both guaranteed & non-guaranteed investments under Treasury’s recent revision of the Crown retail deposit guarantee scheme.

 

Another 6 institutions have opted out of the scheme – the Aotearoa & Christchurch Emergency Services Credit Unions, Asset Finance Ltd, Whakatane; Farmers Mutual Finance Ltd, Palmerston North; Mutual Credit Finance Ltd, Christchurch; & Rockforte Finance Ltd, Gisborne. $84 million of existing investments with them will remain guaranteed until the earlier of the date they fall due or 12 October, but rollovers & new investments won’t be guaranteed.

 

The changes took effect on 1 January, when Treasury gave institutions the option of accepting revised deeds or ceasing to offer guaranteed deposits. Under the revised scheme, deposits will be termed guaranteed or excluded securities.

 

63 institutions that continue to participate in the scheme have $130 billion of deposits guaranteed.

PGG Wrightson Finance registered a new prospectus on 21 December to cover the addition of the excluded securities. Finance director Mark Darrow said interest rates for excluded securities would be around 1% higher than for guaranteed securities.

Mr Darrow said the change in the scheme allowed a much longer & more balanced transition – effectively over 2 years – back to “business as normal, where all companies are judged on their merits without the underpinning cover-all guarantee. If you consider that the fundamental reason for the guarantee scheme in the first place was to support the weaker finance companies and thereby their investors, you could imagine that, as one of the larger & stronger companies, we look forward to the ultimate cessation of the scheme. Notwithstanding, we recognise the need to provide stability during one of the worst financial times in recent history. “By the time the extended Crown guarantee scheme finishes in December 2011, the investor market would have had an extensive period to view the operation of the new non-bank-deposit-taker regulatory framework, which includes much more robust governance, including a compulsory credit rating, independent directors, a detailed risk management programme & new capital adequacy requirements. This will provide much higher levels of transparency, surety & comfort for investors.” Mr Darrow said PGG Wrightson Finance maintained its key reinvestment rates at close to 80% over the last 6 months and had only dropped below 65% for one month in 3 years. Want to comment? Go to the forum.

 

Attribution: Company release, Treasury release, story written by Bob Dey for the Bob Dey Property Report.

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PGG Wrightson Finance gets bankers to create formal syndicate

Published 21 December 2009

PGG Wrightson Finance Ltd said on Thursday it had formed a formal banking syndicate with the Bank of New Zealand & the Commonwealth Bank of Australia to provide ongoing wholesale funding to the business for an initial period of 2 years. The facility replaces previous bilateral facilities. PGG Wrightson Finance chief executive Mark Darrow said: “While our 2 banking partners remain unchanged, forming a syndicate provides a structure to which other banks can easily join, and it is certainly our intention to broaden the syndicate further in 2010 with additional banks being added. “In times of very tough financial markets and tight liquidity, it has been great to receive continued support from our bank partners, with facilities that extend to late 2011 as part of our overall funding strategy. “Wholesale bank finance forms part of a conservative & diversified funding structure used by the company to fund its business. “Our largest funding source remains our client investor base, with over 6000 clients providing various types of secured & unsecured deposits, followed by NZDX-listed bonds, wholesale bank lines & shareholder equity.”

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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PGG Wrightson Finance secures new $100 million facility

Published 10 June 2008

PGG Wrightson Finance Ltd said today it had obtained a $100 million facility from ASB Bank to support the continued growth of its rural lending.PGG Wrightson Group’s general manager of financial services, Michael Thomas, said the facility marked a new banking relationship that would complement the existing sources of funding: "Bringing in a new bank & additional funding at this point will ensure that PGG Wrightson Finance continues to grow. That this could be achieved in the current environment reflects the sound lending & profitability of the business."PGG Wrightson Finance currently funds its loans with retail deposits, bonds listed on the NZDX, bank credit lines & parent company equity. This diversity of funding is a strength of the PGG Wrightson Finance business model, as is the support it receives from its retail deposit clients.

 

“This retail support has seen PGG Wrightson Finance counter the industry trend of lower reinvestment rates with a rate of 78% last month and an average rate of 80% over the past 10 months."PGG Wrightson Finance, a subsidiary of PGG Wrightson Ltd, is a specialty lender to the farming sector, with a primary focus on the dairying, arable, sheep & beef sectors. Its finance services include seasonal finance, term loans, livestock finance, grain finance, farm input finance & equipment finance. The company also offers on-call & secured deposit investments to the public.

 

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Attribution: Company statement, story written by Bob Dey for this website.

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