Rates round-up
Contact’s proposed fixed bonds rated; Final Provincial payout; Bridgecorp directors appear in court - again
Monday, March 2nd 2009, 5:00AM
Contact’s proposed fixed bonds rated
Standard & Poor’s has assigned its BBB rating to the fixed-rate bonds to be issued by Contact Energy.
Proceeds from the bond issue will be used to fund Contact’s increasing capital-expenditure program.
S&P said Contact’s ratings were not immediately affected by the company’s substantial forecast earnings decline, due to “significant headroom in the company’s financial profile at the BBB rating. Furthermore, Standard & Poor’s believes that the unusual combination of poor North Island and strong South Island hydrology – which led to electricity price separation that, in turn, is driving the lower earnings – is unlikely to be sustained”.
Since Contact’s fixed bond rating was assigned, the company has posted a 79% slump in first-half profit.
Final Provincial payoutProvincial Finance will be in a position to make a final payout to investors, taking repayments to around 92 cents in the dollar, thanks to an out-of-court settlement.
Receivers PricewaterhouseCoopers (PWC) had been chasing guarantor Veda Advantage for damages over an alleged multimillion-dollar fraud conspiracy which impacted on Provincial’s loans.
The case had originally been set for a three-week hearing in the High Court at Auckland but the matter has been settled between PWC and Veda (formerly Baycorp Anvantage).
A final payment to investors, who have so far received 90.5 cents in the dollar, would be made in the next few months.
“It’s going to bring the ultimate outcome to debenture holders to within the region of 92 cents in the dollar,” receiver Maurice Noone says.
Christchurch-based Provincial went into receivership in May 2006, owing around 14,000 investors about $296 million.
Bridgecorp directors appear in court - againAll five Bridgecorp directors made court appearances last week.
Chairman Bruce Davidson and non-executive directors Gary Urwin and Peter Steigrad appeared briefly in the Auckland District Court on Wednesday on Securities Act charges and were remanded at large and without plea until Tuesday, 21 April.
Bridgecorp founder Rob Petricevic and finance director Rob Roest have also been remanded.
All the criminal charges laid carry the potential of either a five-year prison sentence or $300,000 fine. The civil proceedings seek declarations of civil liability for each director and penalties of up to $500,000 for each director.
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