What is it called and what sort of savings product is it?
Strategic Finance is offering investors something different - unsecured subordinated notes.
Who is the company behind it?
Strategic Finance is one of the largest finance companies in New Zealand. Its parent was recently
acquired by ASX-listed Allco HIT, a member of the giant Allco Finance Group.
Who is the target market?
This appeals to investors who are seeking an uncomplicated, fixed-interest investment product offering a better rate of return than secured debenture stock. For instance, Strategic's three-year secured debenture stock is paying 8.45 per cent (for less than $50,000) and 8.60 per cent for its unsecured notes.
What return does it offer?
It offers 9.95 per cent annually with interest accrued daily and paid quarterly.
When was it launched?
April 10 and it closes May 25.
What other products is it like or is it competing with?
Subordinated notes are offered by other New Zealand finance companies but few with Strategic Finances top tier status. Strategic Finance has an investment grade B1 rating from Rapid Ratings.
Is it long term, short term or medium term?
It's a three-year term.
What is the unique selling point?
It's a three-year investment with a B1 rated company returning high rates. Strategic Finance is going to use the money raised to meet the demand for good quality property loans in Australia and New Zealand.
How strong a stomach do you need for it?
Suitable for delicate to moderate stomachs. As at December 31, 2006, Strategic Finance has shareholders' funds of $68.6m.
What's the hitch?
Subordinated Notes are unsecured and rank behind all other deposits and creditors of Strategic Finance, but before shareholders' capital.
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