NZ guarantee provision rising again
After cutting provision for guarantees for two consecutive months, the New Zealand government raised the provision in its February 2010 financial statements, and, following Strategic Finance's filing for receivership, the change prompted worries that other finance companies could be on the brink of such a move.According to data compiled by Interest.co.nz, there are 48 finance companies that are currently under receivership or liquidation or moratorium or in default or have their payments suspended, though not all these companies may be covered under the government guarantee.In the statement for eight months ended February, the government upped provision for retail guarantees by NZ$78 million to NZ$849 million. Strategic was the largest among the three guaranteed finance companies to have gone into receivership so far. Strategic had about 10,000 debenture holders owed around NZ$368 million and other holders owed around NZ$23.5 million at the time of filing for receivership.As of February 28, the government had guaranteed deposits of 73 financial institutions totalling NZ$133 billion, unchanged from the month before.