Structured Finance suspends payments, NZ$33 million of deposits put on ice

Property financier Structured Finance has suspended repayments of debentures and interest to its 172 debenture holders who are owed about NZ$33 million. The company cited continuous deterioration of the property market for its decision. Structured Finance is owned by Martyn Reesby and Gregory Hinton, through Reesby Holdings Limited. The company is not covered by the government deposit guarantee. We have left messages with Reesby to ask if they had applied for the guarantee. We also asked Treasury, who said they do not pass on information about who has applied, only those who had been approved. Structured Finance's Trustee is Perpetual Trust. Here is the full statement from Structured Finance on the decision:

Structured Finance (NZ) Limited (SFL) has written to its debenture holders to advise them of its decision, effective immediately, to suspend debenture and interest repayments. The decision to suspend repayments results from the continued deterioration of the property market, its subsequent affect on the underlying asset values of loans advanced by SFL and the uncertainty surrounding the timing of loan settlements. The Company Directors say taking this action now means that all debenture holders are treated equitably. They consider that a far better outcome for debenture holders can be achieved in the current environment through an orderly and managed workout of its loans, rather than forcing asset sales at unrealistically low prices. The Directors say the Company is well capitalised, has no related party lending and no offshore loans. The loans are principally secured via first and second mortgages over residential and commercial property in Auckland. SFL is arranging an independent review of its loan book and will provide a full report including audited accounts to the Trustee as soon as possible. SFL currently owes 172 debenture holders approximately $33 million. SFL has operated in the property finance sector since 2000. During this time the company has advanced over $600 million to property investors and property developers.