Published 4 August 2008
AXA NZ suspended trading today in the wholesale class of its Mortgage Backed Bonds fund and warned retail investors to behave themselves or trading in their fund would be suspended too.
AXA has $229 million under management in the 2 bond classes – $112 million invested by individuals in the class A bonds and $117 million by wholesale or institutional investors in the class C bonds. Trading was suspended for class C investors of more than $1 million.
Mortgage Backed Bonds Ltd, an AXA subsidiary, suspended wholesale redemptions for at least 90 days but will continue to pay income distributions to all investors, wholesale & retail.
AXA NZ chief executive Ralph Stewart said: “The Mortgage Backed Bonds fund has good levels of liquidity, currently 14%, it has no arrears and it has never had a default. There are no property developments in the portfolio and all the buildings over which mortgages are held are established & well tenanted. There are no related-party loans.
“The reality is that this is a solid investment which has delivered attractive, consistent returns. The fund is performing well. However, we cannot ignore the market sentiment and the impact this is having on investor confidence.”
Mr Stewart said retail investors could continue to invest or withdraw as usual. “However, it is possible that if withdrawals from smaller investors dramatically increase, we may be forced to suspend trading in the retail bonds as well.”
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Attribution: Company release, story written by Bob Dey for The Bob Dey Property Report.