tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, February 23rd, 3:51PM

News

rss
Latest Headlines

Money Managers double whammied

Investors told their $20 million bond won't be repaid on time and Securities Commission suspends First Step investment statement.

Friday, April 27th 2001, 10:50PM

by Philip Macalister

New Zealand's largest financial planning firm has hit two major snags this week. First up the Securities Commission has suspended the investment statement for Money Managers' highly popular First Step mortgage funds.

Secondly, 1700 investors who put money into the Metropolis property development are about to get a letter from the trustee saying that the $20 million bond issue won't be repaid on the due date - May 20.

Marketing manager Al Scott says the trustee, Tower Trust, is sending a letter to bondholders telling them that it is "unlikely the developer will be in a position to repay the bonds (on the due date)."

Investors put $21 million into the bonds and there is a further $4 million due to be paid out in compound interest.

Scott says Money Managers are "reasonably concerned" about the missed payments, especially since it was not made aware of any problems until quite recently.

The Metropolis Subordinated Property Bonds were issued in September 1998 and offered to pay investors 14% annually, over an estimated term of 19.5 months.

The money raised was used to refinance existing mezzanine debt of the Metropolis development in Auckland's High Street. The 38-level development consists of 345 apartments and 23 penthouses with 17 retail/commercial premises and 210 carparks.

Scott says the problem is that the developer hasn't managed to sell as many apartments as forecast, consequently the money isn't available to repay the bonds. While the news seems bad investors still have their security and refinancing packages are currently being negotiated.

On top of the Metropolis problems, the Securities Commission has suspended the First Step investment statement over the issue of fees.

First Step is a series of four mortgage funds which were set up in September last year to replace traditional contributory mortgage funds and to take on the mainstream mortgage backed trusts. It has been highly popular with Money Managers' clients, attracting more than $125 million since launch date. (Previous story)

Money Managers promote the fund as having no fees, however the manager, Securities Registries Limited, take a portion of the margin, that is between the money invested and what is paid to the investors.

Scott says the "no fees" marketing is based around the fact that the fund has no entry or exit fees.

He says the issue is "semantic". However the company is happy to meet the Securities Commission's demands and has withdrawn the investment statement and all other advertising.

Since there is no investment statement for the product, Money Managers can't promote the funds.

"We are not too concerned about it," Scott says.

He says the company is working to fix the problem: "We want to comply (with the commission)."

Scott says the tax structure of the trusts is not under question.

« Super 12 and superannuationSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.45 7.05 6.85
ANZ 8.64 7.99 7.49 7.35
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.39 6.89 6.75
ASB Bank 8.64 7.39 6.89 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - ▼7.29 ▼6.85 ▼6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.95 7.65 7.45
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.15 - -
Co-operative Bank - Owner Occ 8.40 7.35 6.89 6.75
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.85 7.39 7.25
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.85 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.59 7.29
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.35 7.89 7.65
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.35 6.89 6.75
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.90 7.39 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.95 7.45 7.29
SBS Bank Special - 7.45 6.95 6.79
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 7.05 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.19 7.55 7.55
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.39 6.75 6.75
Unity 8.64 6.99 6.85 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.45 7.37 6.77

Last updated: 23 February 2024 11:59am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com