Macquarie winds down Fortress Notes
By Jason Krupp
Aug. 25 (BusinessDesk) - The trustee of the Macquarie Fortress New Zealand Notes says it's preparing to wind down the securities, having recently sold a portfolio of senior secured loans in the U.S.
The announcement from Macquarie Fortress Investments Ltd., a unit of the Australian investment bank, comes after the notes were suspended on July 18 to complete the sale, with the proceeds going toward repaying debt and to repay investors.
The trustee said the decision to sell the portfolio was taken after considering the current uncertainty in global financial markets, the average price at which the loans were trading, as well as the expected legal maturity of the loans in the portfolio.
"On a risk adjusted basis and given the time value of money, the sale of the portfolio and the repayment of Fortress Notes would be in best interests of noteholders, especially having regard to the uncertain economic outlook," said Macquarie Fortress Investments director Peter Lucas.
Once the costs of winding up the
structure are factored in, noteholders will be paid an
estimated 45 cents per $1 face amount. That's short of the
46.1 cents per note quoted by Macquarie in its last update
to investors on July 29.
The distribution is to be completed in about 60 days.
Macquarie Fortress New Zealand Notes were first issued in 2005, and subsequently restructured in 2008 after the decline in senior loan prices as a result of the global financial crisis.
Under the terms of the restructuring, the leveraged facility was refinanced to remove market value covenants, and it was agreed that all cash flows would be used to repay debt before distributions to investors.
The 11.5% notes, which expire in May next year, last traded at 27 cents in the dollar on the NZX Debt market.