Standard & Poor's has downgraded the credit rating of South Canterbury Finance in the wake of businessman Allan Hubbard's troubles.

The international credit rating agency lowered its long term rating from B+ to B-, and its short term rating to C, while warning further downgrades can't be ruled out.

A C rating is defined as a firm being vulnerable, and dependent on favourable business and economic conditions to meet its financial commitments.

Standard & Poor’s says South Canterbury Finance could fall to CCC if investors shun the lender, or fresh credit concerns emerge in the next few weeks.

The downgrade follows word the Serious Fraud Office is investigating South Canterbury Finance’s president, Allan Hubbard for alleged fraud in his other company, Aorangi Securities.

The downgrade has forced SCF’s chief executive Sandy Maier  to withdraw the company investment prospectus, for the second time, in order to update the new credit ratings.

Sandy Maier says the company has $519 million in secured debenture stock maturing in October, and a healthy number of investors had been rolling over their investments.

Treasury has confirmed eligible depositors in SCF remain covered by the Crown’s retail deposit guarantee scheme.

Separately, Mr. Hubbard has said he hopes to confirm a deal with an overseas firm that will inject capital into SCF by the end of the month.