Levin-based Oxford Finance yesterday became one of the highest-rated finance companies in New Zealand, gaining an investment grade BBB- rating from Standard & Poor's.
S&P said its rating on the motor vehicle and property lender reflected the "implicit and explicit support" the company received from its owner, trust-owned Horowhenua and
Kapiti coast electricity network business Electra Group.
"The credit strength of the group stems from Electra's natural monopoly position, benign regulatory framework, good operating performance, and stable service area," said S&P credit analyst Peter Sikora.
"These factors are offset by the group's expansion and acquisition appetite and the higher risk profile of its subsidiary, OFC."
S&P considered Oxford Finance's credit profile was lower than its parent's, reflecting its "relatively high-risk loan portfolio, small capital base, confidence-sensitive funding profile, and modest risk-management framework ... these weaknesses are partially offset by Oxford Finance's strong interest margins and prudent approach to balance-sheet growth."
Oxford Finance has a loan book of about $51 million and debenture funding of about $47 million.
