Goldman Sachs JBWere loses its RBNZ exemption
Goldman Sachs JBWere Capital Markets has been issued an A2 credit rating with a negative outlook, ending its exemption from the Reserve Bank’s regulation for non-bank deposit takers.
Wednesday, June 30th 2010, 8:55PM
by Paul McBeth
Moody's Investors Service praised the investment bank's prudent liquidity policy, saying it results in "very strong coverage of its short-term obligations and liquidity metrics that are towards the top end of Mood's rating range," and said it had the capacity to further spread its funding base.
"The ratings of Goldman Sachs JBWere reflect the group's established franchise in Australia's capital markets, its prudent risk and liquidity profiles, and its strong relationship with the Goldman Sachs Group," said Marina Ip, a financial institutions analyst at Moody's. "Where GSJBW retains risk, we view the expertise of the Goldman Sachs Group to be an important asset in managing the risk/reward trade-off."
Still, it received a negative outlook due to its close relation with major shareholder Goldman Sachs Group.
The investment bank comes under the central bank's NBDT supervision regime by virtue of issuing investment notes, an unsecured cash deposit product. In February, it was granted an exemption from having a credit rating by the start of March.
The unit of Goldman Sachs JBWere acts as the main treasury entity for the Australasian group, receiving surplus deposits from and deploying funds to other related parties. As at December 31, it had $116.7 million worth of investment notes on issue, compared to $85 million at November 28, according to its financial statements published on the Companies Office website.
Paul is a staff writer for Good Returns based in Wellington.
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