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NZF to renegotiate Westpac funding after Genworth downgrade

The stock exchange-listed NZF Group is having to renegotiate its wholesale mortgage funding facility with Westpac early because international ratings agency Moody’s Investor Services lowered its rating of re-insurer Genworth Financial Australia.

Thursday, February 26th 2009, 5:00AM

by Jenny Ruth

Genworth provides re-insurance for loans NZF’s subsidiary NZF Mortgages originates using the Westpac facility. Moody’s downgraded Genworth one notch from "Aa3" to "A1" last Friday and said it was on negative watch, signalling a further downgrade is likely.

Genworth also has an "AA" rating from international ratings agency Standard & Poor’s, the equivalent of Moody’s "Aa2" rating and two notches higher than Moody’s current rating, which was reaffirmed in December.

A condition of the Westpac facility was that Genworth retain a Moody’s rating at or above "Aa3" and an S&P rating at or above "AA-". Westpac has now waived that requirement for 60 days.

"The downgrade was a technical breach of the facility," says NZF Group managing director John Callaghan. "If Westpac wanted to, it could have pulled our facility and stopped us lending. They’re obviously very happy with the relationship," he says.

The facility was to have been reviewed from October 18 and NZF had already started the review process but Genworth’s downgrade had brought that review forward, he says.

Genworth also re-insures loans for wholesale facilities Westpac has provided similar organisations in Australia which are now also under review as a result of the Moody’s downgrade.

NZF first arranged a $100 million facility with Westpac in September 2005 to diversify its source of finance and lessen its dependence on debenture funding. It had increased the facility to $200 million by December 2007. It also has a $40 million line of credit from Commonwealth Bank of Australia.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ ▲8.15 ▲6.79 ▲6.45 ▲6.29
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 ▼5.65 ▼5.55 ▼5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 6.39 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - ▼6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 ▼5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society ▼8.10 ▼6.19 ▼5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.24 6.09 5.69

Last updated: 1 November 2024 2:24pm

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