Credit insurer said to have cut cover to Vistry suppliers, shares slide

(Sharecast News) - Vistry tumbled on Monday following a report that leading credit insurer Allianz Trade is reducing the cover it extends to suppliers of the housebuilder. According to the Financial Times, which cited people familiar with the matter, the insurer warned suppliers in recent weeks that it is adjusting its credit limits for Vistry, which could result in cover being reduced by up to 70%. One of the sources said that the final level of cover provided will depend on Vistry's financial performance in the weeks ahead.

Suppliers buy credit insurance to protect themselves in case their customers fail to pay for goods and services; when coverage is withdrawn, suppliers to the affected company may demand payment upfront. Credit insurance is often provided by several insurers, and suppliers may still choose to continue trading with Vistry even without cover.

Sources told the FT that the adjustments to credit limits affect new trading agreements with Vistry and do not apply retroactively.

Vistry told the Financial Times: "Credit insurers continue to provide substantial cover for our supply chain which more than meets the group's requirements on an ongoing basis. We are not aware of any supplier withdrawing trade from Vistry due to credit insurance changes and we have seen no interruptions to our supply chain."

At 0855 BST, Vistry shares were down 8.4% at 259.69p.