Macquarie Fortress Notes (FTNFA)

[Enumerate]

Traded in NZ as FTNFA.NZX - there is also a more actively traded Australian fund MFNHA.ASX

Any interest in a discussion?

[Sideshow Bob]

.......Yup

[Arthur]

Looking good if Macquarie and their manager sell the assets and distribute sooner rather than later. If they wait until the second down leg it could all turn to custard. Possible capital return range minimum is now twice the listed price, leverage is dropping rapidly. Have to hand to Macquarie on this one, their loan restructure was brilliant.

[Newman]

Has anyone got a copy of "Macquarie New Zealand Fortress Notes Security Trust Deed" dated 12 March 2005?

[Lizard]

Has anyone got a copy of "Macquarie New Zealand Fortress Notes Security Trust Deed" dated 12 March 2005?

Is it the same as the Trust Deed for the Macquarie Fortress Australia Notes? Sorry, I get somewhat confused between the FTN and MFN as to whether they are identical? If so, the Trust Deed for the MFN is available via the ASX web-site announcements (2005).

[Enumerate]

Very thinly traded in NZ (FTNFA). Much more activity in Australia (MFNHA).

Since the restructure, there is now one fund (and reducing leverage facility) - there are three Macquarie investments that have relative proportions of this fund.

Of course, the NZ instrument matures in 2012; whereas the Australian one could theoretically go to 2035 (practically, with a mark to market value of about 96% and a further maturity profile of 3-5 years - it should be possible to liquidate at any time).

The reducing leverage, with loan maturities and leverage payback, will reduce the performance of the fund (they make a small margin over the LIBOR rate funding the leverage).

BTW I have a prospectus for the Australian units - it contains extracts of the Australian Trust Deed.

[Newman]

Is it the same as the Trust Deed for the Macquarie Fortress Australia Notes? Sorry, I get somewhat confused between the FTN and MFN as to whether they are identical? If so, the Trust Deed for the MFN is available via the ASX web-site announcements (2005).

The Australian one (MFNHA) has a maturity date of 2035, with early exit times in 2014, 2023, and 2032. The early exit could at a premium or discount.

The NZ one (FTNFA) matures in 2012. I did not find any details about it.

[Lizard]

The Australian one (MFNHA) has a maturity date of 2035, with early exit times in 2014, 2023, and 2032. The early exit could at a premium or discount.

The NZ one (FTNFA) matures in 2012. I did not find any details about it.

Okay, I have found it! Try this link (it will take a few seconds to load the document from there):
http://www.societies.govt.nz/pls/web/DBSIFRAME.I_Init?p_access_no=136A61B81E5C0C9B3D0B9 5766C914870&p_receipt_number=8160920&p_sequence_number=1&p_reference_number=1802834&p_called_from=ALLTAB%7Cdoc1

Another deed dated 11 March and prospectus are also on file there. Comes from the Companies office (http://www.business.govt.nz/companies/welcome-to-the-companies-office-online) - search "other registers" using link from home page down left hand side (I just did a "select all", as I'm not sure which register it is actually on).

[Newman]

Okay, I have found it! Try this link (it will take a few seconds to load the document from there):
http://www.societies.govt.nz/pls/web/DBSIFRAME.I_Init?p_access_no=136A61B81E5C0C9B3D0B9 5766C914870&p_receipt_number=8160920&p_sequence_number=1&p_reference_number=1802834&p_called_from=ALLTAB%7Cdoc1

.

Trading suspension was announced today on ASX because of transaction
of material importance. A bad news?

[Lizard]

Who cares? You have 2 hours to add a simple "thank you" to that post before I delete the link... :P

[Enumerate]

I wouldn't be surprised if Macquarie have decided to liquidate all existing senior loan positions and to close the fund with a cash payout. Given existing mark to market is so high (>96%) and the likelihood of bearish sentiments dominating the medium term outlook - seems logical to cash up.

[Enumerate]

Macquarie have announced they have liquidated the portfolio - looks like about 45cents per unit will be realised. Payments to be completd within 60 days.

[Toulouse - Luzern]

Hi,

Firstly I am very sympathetic to those who lost money in FTNFA.

I went to several Macquarrie promotions about the time FTNFA was floated however I decided not to invest in FTNFA but I did decide to invest in other investment products promoted by Macquarrie; eg MCB010, OMIP, CBAFA, AMP China Growth Fund ASXCGF ...

FTNFA stopped making interest payments very early on as I recall.
Bank TDs were very low interest at the time.

I did however invest in Macquarrie Commodity bonds MCB010 at 8.25% pa. MCB010 was an exotic financial derivative product based on base and precious metal prices. Under some circumstances at maturity you could have lost 100% on MCB010. At times on DX for sales of MCB010 the interest rate was around 50% and the most recent sale a few weeks ago was at 25%. I maintained a close watch on the underlying metal prices on the LMSE etc for most of the 8 years or so, not because I wanted to but it seemed essential to manage the investment. In the event we decided to hold to maturity to get 100% of the capital back. Many investors sold out or took early redemption offers at a loss.

I expect MCB010 will pay out 100% this week (we are all touching wood and fingers crossed)

We were in a couple of Finance companies TDs Strategic Finance and Direct Broking. I considered them the best at the time and rejected others like Hanover and Nathan etc. When Mr Petrovic invested in DB we decided to exit both finance company TDs at the next maturity date and did so without loss.

It is an understatement that I did not expect the financial turmoil we have seen during the 8 years.

I did expect that the Bush follies and extravagances would ultimately result in a fall in the US markets and that he and his advisors must have been very aware of the probabilities and consequences of their decisions and financial implications. What has surprised me has been the time that it has taken for all of the chickens to come home to roost in all the various countries. Reminded me of similar situations in NZ with Chase business model and share price and Robert Jones share price etc, Canterbury Finance, Hanover, and other finance and property investment companies it may all look very risky but it takes a very long time to play out.

While DX investments may look low risk, and easy to exit, this is not necessarily so without loss.
Sudden events eg GFC and RBNZ OCR decisions can have a huge impact on NZDX.

Lessons learned for me are that I am unlikely to invest again in derivatives on the NZDX, or in finance companies.

We also have a significant NZDX investment in CBAFA at a small premium over the NZ OCR. For several years it was OK. When the RBNZ set the OCR low in one fell swoop during the GFC, New Zealanders CBAFA investments became either low yielding or presented a significant capital loss if exited right then or instead a long hold to maturity. It seems to me the Govt/RBNZ punished the savers in this case and delivered the bank a windfall profit.


Context: Following Historic Quote on FTNFA is from Stuff:

http://www.stuff.co.nz/business/market-data/2501529/Macquarie-Fortress-notes-worth-something


Last updated 11.04 15 June 2009


Macquarie New Zealand Fortress Notes were issued and quoted on the sharemarket's debt market in May 2005 with a face value of $1 each. Macquarie aimed to pay investors on a quarterly basis equal to the bank bill rate plus 4.5 percent a year.

However, last October (2008) investors were told the deterioration in global financial markets meant the net asset value of their notes was zero cents per note and that hadn't changed until today.

[Toulouse - Luzern]

Macquarrie Commodity Bonds MCB010 - Generator Bonds

We have received MCB010 principal and interest in our bank account today.
We can close the book on this now.

[Sideshow Bob]

Received advice today that payment is near, and will be received 7th of November. 45.02c per note.