Her Majesty The Queen in right of New Zealand
(“the Crown”) entered into a Deed of Guarantee with Priority Finance Limited (now called Viaduct) dated 13 November 2008*, as supplemented by deed dated 1 December 2008, regarding coverage under the Crown retail deposit guarantee scheme.
On 20 April 2009, the Crown gave notice to Viaduct that the Crown was withdrawing the Crown retail deposit guarantee from Viaduct, effective immediately upon receipt of the notice by Viaduct.
The Crown withdrew the Crown retail deposit guarantee under clause 10.3(a) of the Crown Deed of Guarantee, on the basis that the Crown reasonably considers that the business or affairs of Viaduct are being, or are intended or likely to be, carried on in a manner which:
(a) may extend the effective benefit of the Crown Guarantee to persons who are not intended to receive that benefit; and
(b) is otherwise inconsistent with the intentions of the Crown in entering into the Crown Guarantee.
The Crown Guarantee has been withdrawn in respect of all new deposits with Viaduct made after 20 April 2009.
Eligible deposits with Viaduct made up to 20 April 2009 continue to be covered by the Crown Guarantee.
Viaduct has not failed and there has been no event of default under the Crown Guarantee triggering the claims process.
Dated at Wellington this 27th day of April 2009.
JOHN HENRY WHITEHEAD, Secretary to the Treasury.
*New Zealand Gazette, 20 November 2008, No. 177, page 4617