The notes were suspended from trading on the NZX on Friday, as reported on, Good Returns because of the fraud at Refco.
However trading resumed yesterday. Fortress had an exposure to senior loans issued by Refco Finance Holdings, one of the world's leading derivatives and brokerage firms.
However Refco says its financial statements from 2002 to 2005 can no longer be relied on because of an allegedly fraudulent loan made to its former chief executive.
News of this fraud saw Refco's listed equity drop by over 50% and there has been significant volatility in the market price for Refco's senior loans and high yield bonds.
The United States Securities and Exchange Commission has commenced an investigation and the former ceo has been arrested and charged with accounting fraud.
“Due to the uncertainty associated with the financial position of Refco, the (Fortress) investment manager, Four Corners Capital disposed of the Refco loans at a loss.”
The Fortress trustee says that the trading loss from selling out of Refco has resulted in a decrease of 5c on the net asset value of the Fortress Notes.
It has completed an assessment of the likely impact of the trading loss on the interest rate and has confirmed that the interest rate “will not be materially affected”.
It says that the projection contained in the investment statement and prospectus dated remains valid.
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