Repayments halted

Compass Capital has stopped repaying investors, blaming deteriorating credit and property markets.

In a letter, dated August 13, the company told investors that borrowers had struggled to repay their loans which, in turn, affected Compass' ability to repay bond holders.

Executive director Ian Gladwell said repayment of principal and interest had been suspended and directors were preparing a proposal to repay all existing bond-holders.

The directors were "hopeful that all existing bond-holders would be repaid in full over time". Compass was set up in May 2006 to buy some of Bridgecorp's best loans.