S&P's latest verdict on UDC

UDC has had its credit rating increased from BBB to 'BBB+ and its outlook is recorded as stable.

S&P says the upgrade reflects UDC's improved risk-adjusted capital ratio, which makes it more likely that the finance company will maintain very strong capital levels over the next 12 months at least.

The agency says its ratings reflect UDC's current ownership structure, and business and financial profiles. "Nevertheless, we note that ANZ has been considering options to divest its ownership of UDC. A change in ownership is likely to weaken our rating on UDC in several ways, including a weakening in the finance company's business and financial profiles--for example if the funding facility from ANZ Bank New Zealand is discontinued as a result, or if the new shareholder plans to reduce the capital level. "

"An ownership change would also result in the removal of the rating uplift that we have incorporated because of potential for parent support beyond that extended on a business as usual basis."