Strategic Finance said yesterday it expected to report an operating loss in the vicinity of NZ$15.5 million. Strategic reported a net profit of NZ$14.6 million in the six months to December 2007, and said in March this year that it expected to report a profit of NZ$28.2 million in the 12 months to June 2008.The loss of confidence of investors in finance companies and the declining property market in New Zealand has since forced many large firms to suspend redemptions of secured debenture stock and subordinated notes. Strategic did so two weeks ago.Strategic is presumably still in talks with HBOS to invest in, and extend its credit line to, the firm.Strategic's management proposes a repayment of 10 per cent of capital in March 2009, September 2009 and March 2010; the investment of the remaining 70 per cent of capital in three-year, four-year and five-year bonds, and a "reset" (and presumably a reduction) in the interest rate paid on the debenture investments. The firm will ask investors in subordinated notes to convert those to investment in five-year "secured" bonds.