Cash-strapped Land Bank asks creditors to co-ordinate

The Land Bank is asking its creditors to co-ordinate with each other after it defaulted on its obligations last week.

The formal declaration of an event of default by the bank last week meant that investors in its notes, a debt instrument used to fund its commercial activities, can demand immediate repayment of debts owed.

The Land Bank said on Tuesday it was requesting the note holders to form a co-ordinated group, and had taken up an offer from the Association for Savings and Investment SA to take the lead on co-ordinating the note holder group.

The bank said it was seeking a deferral of all interest and capital payments which fall due within the next six months, for a period of 12 months.

Moody’s Investors Service downgraded the Land Bank further into junk on Friday on news of the institution failing to honour its obligations, and said the government’s willingness and capacity to assist was “weaker than previously thought”. — With Warren Thompson, BusinessLIVE