With the Australian arm of Bridgecorp following its Kiwi subsidiary into administration, ASIC is facing the further embarrassment of more high-yield debenture collapses just waiting to happen.

While Bridgecorp was bad enough to ASIC to stop it raising new funds here, its Kiwi arm carried a three-and-a-half star “investment grade” rating from Property Investment Research – the firm that claims to be the leader in this particular end of the credit rating business.

It’s ASIC’s professed hope that having debenture issuers rated would clean up the industry’s grubby act, but it looks like not much more than hope.

I interviewed the founder and managing director of PIR, Richard Cruickshank, for a Eureka Report story yesterday. He makes the point that development finance is inherently risky and that ratings agencies can’t remove that risk.

But what’s worse than the rated entities that get into trouble is why 83 (ASIC’s number) remain unrated and unlisted.

Cruickshank says some outfits are so bad, PIR won’t take their fees to conduct the research to give them a rating. And we never find out about those who are researched but return a non-investment rating – they’re not published.

“We not being paid to flag risk to the general public and then risk getting sued,” Cruickshank said.

“We’re not public servants.”

Cruickshank could not give a number for how outfits his firm has declined to rate or given a non-investment grade rating, but said there were “quite a few” in both categories.

No, I guess the high-yield debenture market really isn’t for most folks – including Tony D’Aloisio at ASIC.