Public Trust assigned first time issuer rating from Moody's

Public Trust assigned first time issuer rating from Moody's

Public Trust today announced that it has received a first time long-term issuer rating of Aa3 with a stable outlook from Moody's Investors Service Pty Ltd (Moody's). 

Public Trust's Chief Financial Officer, Ken Reilly, commented; "Public Trust's Issuer rating has been assessed on the basis of our solid franchise in New Zealand's trustee market, our strong funding profile and our sound strategic direction. Public Trust welcomes the assessment."

Moody's commented that Public Trust's ongoing strategy to become a more customer centric organisation, alongside the changes made to its lending and investment practices, were key steps to further strengthen its position in the trustee services market.

The stable outlook of Public Trust's issuer rating is in line with the outlook of the sovereign rating of the New Zealand Government, which Moody's noted; "reflects our expectation that Government support is likely to remain very high and that Public Trust's reduced risk appetite will enable it to maintain the credit profile in line with the assigned ratings."

In accordance with Moody's methodology for Government-Related Issuers (GRI), the Aa3 issuer rating of Public Trust reflects the combination of the following inputs: (1) Public Trust's standalone credit profile, reflected by its Baseline Credit Assessment (BCA) of 15;  (2) New Zealand's Aaa sovereign bond rating as a systemic support indicator; (3) a very high level of government support probability; and (4) a very high level of dependence, based on the fact that both Public Trust and the New Zealand Government derive the majority of their revenues from the New Zealand Economy.

"Looking to the future we expect improvements in capital and asset quality metrics. We are implementing prudent changes as part of our strategic direction and we continue to proactively manage risks. Our continued focus on growing core trustee fee revenue, strict control over operating costs and our amended lending and investment practices, will contribute to higher capital levels over time," said Reilly.

Public Trust also has a Crown guarantee that applies to customer deposits held in the Common Fund.  The guarantee on capital is provided under the Public Trust Act 2001 and the guarantee on interest is provided under the Public Finance Act. Neither guarantee is limited by time, quantum of investment or class of investor.

The strong investment grade credit rating combined with the Crown guarantee on Common Fund deposits provides customers with confidence as to their investments with Public Trust.

Notes to editors:
Public Trust is headquartered in Wellington, New Zealand. It reported assets of NZ$980million (approximately US$713million) at 31 December 2009.

Issuer rating: The principal methodology used in rating Public Trust is their "Government-Related Issuers: Methodology Update (July 2010)". This can be found at in the Rating Methodologies sub-directory under the Research & Ratings tab.

Baseline Credit Assessment (BCA): Moody's BCA is rated on a scale of 1 to 21, where 1 represents lowest credit risk.

Rating scale
Moody's overall rating scale goes from Aaa to C (with Aaa being the highest rating). Moody's full issuer credit rating scale follows below.

Credit ratings are statements of opinion issued by Moody's Investors Service and are not statements of fact, an endorsement of Public Trust, or a recommendation to buy, hold or sell securities.

Contact: Leah Phelps, External Communications Manager

Phone: DDI: 04-978 4636 Cell: 029 978 4528