More trouble for Western Bay Finance
Troubles at Western Bay Finance have led Standard and Poor's to downgrade the rating of its sister company Linsa Insurance.
Friday, June 30th 2006, 6:43AM
The ratings agency says Linsa was previously a B- (weak) and is now CC' (Extremely Weak).
"The rating actions follow heightened financial difficulties facing sister company Western Bay Finance," S&P says.
"The liquidity position of WBF has deteriorated markedly as the company faces difficulty raising debenture funding from a retail market wary about the recent collapse of other finance companies.
"As a result, WBF is believed to have breached its trustee covenants, and has stopped lending activities.
"Because of the ownership, business, and financial linkages between WBF and the principally captive insurer Linsa, the financial position of Linsa is considered extremely weak.
Western Bay Finance is one of the smaller finance companies and has had other troubles recently.
It is understood its funds mainly came in via the public, rather than advisers, however it did present at a SIFA Conference years ago.
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