Bridgecorp borderline investment grade: Rapid Ratings
Bridgecorp is gradually moving up Rapid Ratings ratings scale and is now considered “borderline investment grade”.
Monday, February 14th 2005, 10:00PM
It has had its B4 credit rating, for the company and its first ranking debenture stock, reconfirmed until November 26.
This is the second corporate credit rating for Bridgecorp.
In the past year Bridgecorp’s ratings performance has moved from the bottom end to the upper end of this band. Rapid Ratings says a B4 rating suggests that, with respect to the risk of non-payment of corporate debts and/or the degree of risk of insolvency, Bridgecorp is a moderate risk that can worsen with market conditions.
It also suggests that the business of Bridgecorp is moderately good quality.
It indicates that the company, whilst not being investment grade is only one notch below investment grade quality.
Other non-bank finance companies to have ratings are St Laurence, Instant Finance and Strategic Finance. Good Returns understands as many as six other companies have been through the Rapid Ratings process, but have chosen not to release their results.
Rapid Ratings says the qualitative credit assessment pegged the overall rating back to B4 indicating there is scope for improvement in the qualitative performance of the company to raise it to par with its financial performance and position.
It has noted that the company has taken significant steps in the past year to improve its performance, particularly in the areas of transparency of information, credit management and reporting, review and documentation of processes, procedures and controls, extension of its Lloyds credit insurance cover and in the reduction of related party transactions.
Rapid Ratings says that the company has maintained a strong financial performance in the past year, coupled with a strong overall financial position.
“In the past year Bridgecorp has not changed its business model or transaction profile materially. It therefore remains exposed to the volatility and risks inherent in the commercial and residential property development sectors, but has made good progress in the past year in mitigating its risks.”
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