Sydney - Thursday - October 23: (RWE Australian Business News) - Allco Max Securities & Mortgage Trust (MAX, ASX:AXQ) today said it was in breach of the following portfolio tests in the compliance report for the period to October 9 completed by the cashflow and systems manager: * Static Capital Adequacy Test - breach of $9.8m with a grace period expiration date of November 13; and * MTN Liquidity Test - breach of $2.3m with a grace period expiration date of December 31. MAX is assessing its ability to remedy these breaches within its current portfolio testing regime. To the extent that MAX was able to sell assets in its portfolio to remedy portfolio test breaches, based on current market conditions, it would expect to realise significant losses on the sale of those assets, which would in turn reduce the underlying capital base of the trust. As MAX has previously advised, the ability to rebalance the portfolio may be limited because its ability to buy and sell assets is restricted where MAX is, or following the acquisition or sale would be, in breach of the portfolio tests. As noted in its ASX release dated October 15, MAX is in discussions with its financiers to seek a restructure of its debt facilities, which may also facilitate a restructure of the portfolio tests. While the financiers continue to engage with MAX in constructive negotiations, unless and until negotiations are finalised and restructuring documentation is signed, there is no assurance that the restructure of MAX's debt facilities will be concluded successfully.
AXQ Price at posting:
1.5¢ Sentiment: Sell Disclosure: Not Held
