Treasury has already paid the South Canterbury Finance trustees $1.6 billion in a taxpayer bail-out of the beleaguered company, which has gone into receivership.
"It has been paid today, it has been paid to the trustee," Treasury spokesman Angus Barclay told NZPA.
It is understood the payment will cover all investors as well as some ineligible for payment under the Government's Retail Deposit Guarantee Scheme.
Treasury is thought to have considered a single payment early would avoid the requirement to pay out interest to investors.
Receivers were called in to South Canterbury Finance (SCF) today, with Trustees Executors Limited appointing Kerryn Downey and William Black of McGrathNicol.
SCF said it has been unable to complete a recapitalisation and restructure.
As a result, it would have been unable to certify to Trustees Executors, in accordance with the terms of its debenture trust deed, that it was compliant with various financial covenants for the financial year ended June 30.
"Accordingly, South Canterbury Finance Limited has requested Trustees Executors Limited to appoint a receiver in respect of the whole of its undertaking and assets, and Trustees Executors Limited has done so," SCF said.
Timaru-based SCF has around 35,000 depositors and about $1.6 billion in deposits.
Trutees Executors southern regional manager Yogesh Mody said SCF had been allowed extra time to recapitalise, but was unable to do so and had requested a receiver be appointed.
"At this point we, as trustee, agree that it is in the best interests of debenture, deposit and bind holders to do that," Mr Mody said.
The receivers would take possession and control of the charging group's assets.
The company, one of New Zealand's biggest non-bank institutions, is part of the Government's Retail Deposit Guarantee Scheme.
Mr Mody said the trustees had been working with the Crown to enable an early payment, if receivers were required to be appointed.
All depositors and stockholders on SCF's register of debt securities will be repaid by the Crown, acting secretary to the treasury Gabriel Makhlouf said today.
"It is important to remember that the Crown guarantee is not designed to prevent a company from defaulting; it is designed to protect depositors and stockholders affected by a default," said Mr Makhlouf.
A spokesman for Finance Minister Bill English said the Government was taking steps to quickly pay depositors, minimise costs to taxpayers and "ensure minimum disruption to the wider economy".
SCF chief executive Sandy Maier said the appointment was inevitable when it became clear that negotiations to inject fresh capital into the business could not be completed by an August 31 deadline.
"Receivership is disappointing -- and we were working very hard up to the last minute to avoid that outcome.
"At the heart of South Canterbury Finance there is a sound business supporting many successful small and medium sized enterprises. That is the core business of South Canterbury Finance and a real contributor to the economic well being of that sector of the economy."
Much of the focus in the last nine months was on re-establishing that element of the business as the "good bank" with an appropriate capital structure and focused management team, he said.
"We had largely achieved that goal as well as taking the decisions to deal with the other elements of the business that are non-performing.
"Non-core and non-performing assets have been identified and an active recovery programme has made considerable progress in realising those assets corralled in the 'bad bank'."
Steps by the trustee and Treasury to put in place an arrangement for debenture, deposit and bond holders to be paid their full entitlement to principal and interest regardless of their eligibility under the Crown Retail Deposit Guarantee Scheme.
"This is a very satisfactory arrangement for those investors and is recognition of their support for the company."
