Macquarie NZ Fortress now worth "zero cents per note"
21st Oct 08, 1:46pm
Macquarie Fortress Investments Limited announced that its Macquarie New Zealand Fortress Notes were worth zero cents as at 17 October 2008. The fall in the net asset value (NAV) of the notes has been attributed to deterioration in the global finance markets. Holders of the notes will not be required to fund the shortfall. Macquarie, which has become Australia's dominant investment bank and has been called the "millionaires factory" because of its high salaries and bonuses for employees, also said that there had been no further defaults in the Fortress portfolio as it undergoes a refinancing arrangement over the eight years to 2016. "The deterioration in global financial markets has continued to affect the traded prices of US Senior Secured Loans (Senior Loans) in the Fortress portfolio," Macquarie Director Peter Lucas said. "Presently, the cumulative market value of Senior Loans in the Fortress portfolio is below the total debt facility balance. As a result, Macquarie Fortress Investments Limited (as trustee for the Macquarie New Zealand Fortress Notes Trust) estimates that the NAV as at 17 October 2008 was zero cents per Note," Lucas said. "Despite the above, even in the event that there is ultimately a shortfall between the total debt facility balance and the cumulative realised value of Senior Loans in the Fortress portfolio, holders of Macquarie New Zealand Fortress Notes will not be required to fund this shortfall," he said. "As previously notified, the refinancing arrangement concluded in April 2008 is committed for 8 years until 2016 and does not incorporate any market value based repayment triggers. Under this arrangement, the finance provider has no rights to require an accelerated repayment of the debt facility. The final return to investors continues to depend on default and recovery rates of Senior Loans in the Fortress portfolio. Furthermore, there have been no new defaults in the Fortress portfolio."