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March 6, 2008 |
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MACQUARIE FORTRESS: Suffers AU$35 Million Loss The Macquarie Fortress Australia Notes Trust has reported a AU$35 million first-half loss and said there were doubts about its ability to remain a going concern, Sydney Morning Herald says. The listed fund, which is one of three highly geared Macquarie Fortress funds, posted a AU$35.02 million loss for the half year ended Dec. 31, 207, compared to an AU$8.4 million profit in the previous first half. According to the report, the Fortress funds, including a fund listed in New Zealand and an unlisted Australian fund, were hurt by the credit crunch in the US even if they were not directly invested in US subprime mortgage debt. The trustee of the funds, Macquarie Fortress Investments, told Morning Herald that the price volatility in the locally listed trust's portfolio of credit investments was not related to defaults. Instead, volatility was caused by "supply/demand imbalances" in the senior loan market as well as recent interest rate cuts in the US. "The directors continue to view the trust as a going concern and the financial report has been prepared on that basis," Macquarie Fortress said to Morning Herald. "However, there are material uncertainties that may raise doubt about the trust's ability to continue as a going concern. Macquarie Fortress further told Morning Herald that any refinancing of the trust's portfolio would result in a significant increase in funding costs, which would effect interest payments, "if any", of the Fortress Notes. The Macquarie Fortress Australia Notes Trust paid interest to noteholders for the first half of 5.58c per note, up from 5.26c in the previous corresponding period. Macquarie Fortress earlier announced that it had breached loan covenants for the third time this month, forcing it to sell loans at a loss, Morning Herald says. Macquarie Fortress Investments Limited is a wholly owned subsidiary of Macquarie Bank Limited. Macquarie Fortress Investments Limited is the Trustee of the Macquarie New Zealand Fortress Notes Trust. The Trust is engaged in making investments in unlisted notes issued by a Cayman Island entity, the return on which is linked to a leveraged portfolio of the United States dollar denominated senior secured loans. |
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