S&P downgrades, then upgrades Geneva

In a meeting in Auckland, some 98% of stock holders and 100% of note holders voted in favour of the revised repayment plan and amendments to the debenture trust deed. Under the terms of the new plan, debenture holders will have about half of their repayments deferred, while note holders will have their repayments put off until October.

Standard & Poor's cut the finance company's credit rating to SD from CC, something flagged in its previous report, and taken it off creditwatch negative. Two hours later the rating agency upgraded Geneva to CCC with a negative outlook, and boosted captive insurer Quest to CCC from CC.

"The upgrade on Geneva follows the company's success in securing debenture investors' approval and banker support," credit analyst Derryl D'Silva said in his report. "The ‘CCC' rating reflects our view that the finance company has a marginal liquidity position, which is expected to help it meet its immediate principal and interest repayment in full and on time under its new arrangement."

Still, D'Silva said there was significant uncertainty about the finance company's future liquidity position, which depends on favourable business.