The rating agency has downgraded Asset Finance to a B- credit rating in the wake of the last year's takeover deal. The downgrade indicates S&P views the company as slightly more vulnerable to market shocks under private equity ownership.
British investment firm Blackstar Capital acquired a controlling stake in the lender in October. Blackstar built up its stake to 70% in October but has held a minority stake in the business for several years.
S&P believes Blackstar's controlling interest makes Asset Finance slightly more vulnerable, as Blackstar is more reliant on debt to fund its operations.
S&P said Asset Finance is a "largely stable business", but said the consolidated Blackstar Group including Asset Finance was "marginally weaker" than the standalone business.
The rating agency said: "We consider that BCG [Blackstar] has a very small market share and modest business position in its main businesses lines, which together with its high financial leverage constrains the group's credit profile."
S&P added Asset Finance's "regulatory and governance framework does not afford it sufficient insulation from the broader BCG group to rate it above our credit view of the wider group".
S&P predicts a stable outlook for Asset Finance, but said its position could deteriorate if Blackstar's position weakens. It said chances of an upward rating were "limited" in the next 12 months.
Asset Finance offers second mortgages, personal loans and debt consolidation and has about 16 branches across the country. Despite the downgrade, the non-bank lender has outlined plans for expansion under its new owner. Blackstar CEO Mark Stephens has set his sights on global expansion, as well as growing personal business finance.
Blackstar's investment in Asset Finance comes amid growing private equity interest in the non-bank space, as they take a greater market share in New Zealand. The past 12 months have seen other private equity firms, including US giant Cerberus, snap up a stake in Bluestone Asia-Pacific.