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Fortress NZ note holders to receive cash return


Thursday 25th August 2011 2 Comments

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Holders of Macquarie New Zealand Fortress Notes are likely to receive about 45 cents per note when the note structure is wound up.

The notes provided investors with exposure to a leveraged portfolio of United States senior loans. They were first issued in 2005 and they were restructured in 2008 after the global financial crisis affected their value.

Macquarie Fortress Investments, the trustee of the notes, said today that the portfolio of senior secured loans to which the notes are exposed has been sold. The money raised will repay debt and the cash left over will be distributed to note holders as a return of capital. The notes will then be cancelled.

The trustee estimated that cash of around 45 cents per note will be distributed to note holders. The notes had a net asset value of 46 cents at April 29, 2011.

The 11.5 percent notes, which have a face value of $1, last traded at 27 cents on the NZDX. They were due to mature in May 2012.

Between 800 and 1000 New Zealanders have invested $30 million in Macquarie Fortress Notes.

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Comments from our readers

On 25 August 2011 at 2:49 pm Sold up the creek... said:
Just another investment product mis-sold in the good years by the investment banks as if it was a AAA bond. We will remember...
On 25 August 2011 at 4:01 pm Andrew said:
Up the creek, settle down - "as if AAA"??? The underlying loans were almost 100% speculative grade - and then leveraged approx 6 times! If anyone bought them as if AAA they REALLY weren't paying attention to what they were buying. I'm not saying all Notes were sold appropriately, or that it was a great product idea, but they were a (very high cost) way to leverage into speculative-grade loans. Anyone who wanted to do that could. I did - from 15 to 30c - under no illusions about what the product was.
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