RHG Ltd, the Australian home lender, said a court ruling that it breached a loan covenant may trigger defaults on as much as A$2.5bn of debt. The shares fell to a three-month low.
The Sydney-based company defaulted on a A$324m obligation as a result of the court’s decision, leading to cross-defaults 'in certain other loan facilities,' it said in a regulatory statement today.
RHG is appealing the ruling, which may also cause it to lose A$47m of future income and A$26.8m of cash, according to the statement.
'The secured creditors may wish to take steps to enforce their security including the appointment of a receiver to the underlying pool of mortgages,' Arthur Karabatsos, a senior analyst at Moody’s Investors Service, said in a telephone interview from Sydney today.
bloomberg.com, The Australian