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AXA halts wholesale withdrawals from $229m MBS fund

AXA New Zealand suspended wholesale withdrawals from its NZ$229 million mortgage-backed bond fund and said it may freeze access for small investors if there's a dramatic increase in demand.

Monday, August 4th 2008, 4:37PM

by Jonathan Underhill

AXA unit Mortgage Backed Bonds will continue to make interest payments, AXA NZ chief executive Ralph Stewart said. The fund has two types of securities: Class A bonds for individual investors and Class C bonds for institutions, or wholesale investors. Class C bonds amount to NZ$117 million.

"These are difficult times for investors," Stewart said. "The fund is performing well, however we cannot ignore the market sentiment and the impact this is having on investor confidence."

AXA's decision comes after AMP Capital last week froze redemptions from its $420 million New Zealand Property Fund in a sign that the liquidity squeeze that's sunk riskier financial firms is starting to bite funds with relatively safer investments. AXA's bond fund has 14% liquidity, no arrears and no related-party loans, it said today.

Wholesale redemptions were suspended for at least 90 days. Smaller investors with Class A bonds can continue to withdraw though "it is possible that if withdrawals from smaller investors dramatically increase we may be forced to suspend trading in the retail bonds as well," Stewart said.

The move is "a precautionary measure to preserve overall fund liquidity," he said.

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ANZ 5.19 4.15 4.09 4.49
ANZ Special - 3.65 3.59 3.99
ASB Bank 5.20 4.15 4.09 4.39
ASB Bank Special - 3.65 3.59 3.89
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BNZ - Mortgage One 5.90 - - -
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Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
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Finance Direct - - - -
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Heartland Bank - Online - - - -
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Housing NZ Corp 5.19 ▼4.15 ▼4.09 ▼4.39
HSBC Premier 5.24 3.35 3.35 3.35
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.65 3.85 3.95 3.89
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Kiwibank Special - 3.55 3.59 3.99
Liberty 5.69 - - -
Napier Building Society - - - -
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Resimac 5.30 4.86 4.14 4.19
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RESIMAC Special - - - -
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SBS Bank Special - 3.69 3.69 3.99
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