Fortress investors face long wait
Macquarie Fortress Investments has announced that it has successfully completed the refinancing of borrowings for the underlying portfolio of US senior loans but that the final return to investors remains uncertain.
In an announcement released to the Australian Securities Exchange this morning, Macquarie said the new financing differed from the previous financing in a number of important ways, including that all cash flows generated by the portfolio had to be used to meet interest and ongoing portfolio expenses, with any excess cash flow being applied to reduce the principal outstanding on the new finance.
“There will therefore be no payments on Macquarie Fortress Notes until the new financing has been fully repaid,” the announcement said.
“The final return to investors is uncertain and depends on a range of factors affecting the portfolio including default and recovery rates, prepayment rates on the senior loans in the portfolio, underlying interest rates as well as the A$/US$ foreign exchange rate,” it said.
“If the portfolio has no defaults, which should not be assumed to be the case, the net asset value could recover to 83 cents per note in due course.”
AUTHOR
Mike Taylor
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