The demise of many finance companies in the past two years has led to the demise of a company that rates them.
Axis Ratings, a New Zealand owned credit rating agency that focused on the non-bank sector, is shutting up shop in part because business has dried up and also because it has to get accreditation itself.
To continue in this business we need confidence that, when the current upheaval in the market settles, there will be sufficient companies still funding out of the retail market to make a viable business out of credit ratings," managing director Ron Keene said.
The company was closing even though upcoming changes in Reserve Bank Amendment Act No 3 will require finance companies to be rated to gain Reserve Bank approval as registered deposit takers.
Axis Ratings itself requires accreditation as an approved rating agency to continue to rate finance companies and has been pondering how to get this.
"We saw the reality of strong support from an international rating company as essential to meet the Reserve Bank's requirements.
"In the event, Rapid Ratings International Inc, of whom we are a technology licensee, was not able to direct its attention to the New Zealand market at this time to give us the support required to satisfy the Reserve Bank's accreditation requirements," Mr Keene said.
Axis Ratings will continue to support and monitor ratings it has in the market until their expiry, but will not be undertaking any further rating assignments.
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