Rating cut for Allied Nationwide

A material deterioration in liquidity and the increased risk of a cash shortfall from now until October, should reinvestment rates fall from already modest levels or loan repayments be delayed, led Standard & Poor's to lower its long-term rating on New Zealand finance company Allied Nationwide Finance to 'B' from 'BB-', on Friday. S&P also left the 'B/B' long- and short-term credit ratings on CreditWatch with negative implications.

ANF's credit rating will be cut again within the next three months if any of these factors deteriorate further. Critically, S&P warned that "if credit concerns are much worse than currently envisaged and if, in our opinion, ANF's financial flexibility and contingent plans to respond to liquidity pressures are limited such that default is possible within six months under realistic scenarios, the rating could be lowered into the 'CCC' category."