New Zealand-Based Asset Finance Ltd. Assigned ‘B/B’ Ratings; Outlook Negative On Susceptible Business Profile

Melbourne, Dec. 22, 2009 —Standard & Poor’s Ratings Services said today it had assigned its ‘B’ long-term counterparty credit ratings to Asset Finance Ltd. (AFL), a privately owned finance company based in Whakatane, New Zealand. We also assigned our ‘B’ short-term counterparty credit rating. The outlook is negative, which recognizes AFL’s vulnerability to asset quality and liquidity pressures in the current
difficult operating environment.

The ratings reflect AFL’s susceptible business profile; the company is small and its market position is not significantly different to that of its competitors. It also has a vulnerable funding profile that relies on ongoing debenture and unsecured-note investor support. Although shareholder support has been steadfast through the recent difficult operating environment, the ability and willingness of shareholders to provide additional capital, if required, remains unclear and depends on AFL’s ability to generate sufficient commercial returns to shareholders.

“And yet despite these weaknesses and vulnerabilities AFL has shown it can manage its business through what has been a difficult time for finance companies raising debentures in New Zealand,” Standard & Poor’s credit analyst Peter Sikora said. “The company’s operating performance has also been supported by the expertise of its board and staff in effectively managing the company’s credit losses to date.”

The negative outlook recognizes AFL’s vulnerability to asset quality and liquidity pressures in the current challenging environment. The outlook could be revised to stable if AFL were to boost its balance sheet liquidity, and show us that it could manage its liquidity through 2010. We would also need to see that its asset quality problems had stabilized and that the company’s profitability had become more sustainable.

“AFL’s rating could be lowered if its funding and liquidity position weakened materially as a result ofdeterioration in its asset quality or profitability,” added Mr. Sikora.

We do not expect to raise the ratings on AFL in the short term. Before we could consider an upgrade, a significantly large capital injection would be needed to moderate the group’s susceptibility to any unforeseen operational risk loss and to help it meet new capital adequacy requirements.

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Media Contact:

Sharon Beach, Melbourne, (61) 3 9631 2152, sharon_beach@standardandpoors.com

Primary Credit Analyst:

Peter Sikora, Financial Institutions Ratings, Melbourne, peter_sikora@standardandpoors.com

Gavin Gunning, Financial Institutions Ratings, Melbourne, gavin_gunning@standardandpoors.com