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SYDNEY - Macquarie Bank has warned two of its investment funds could lose up to 25 per cent, or A$300 million ($338.9 million), of their value as the fallout from the United States' sub-prime loan crisis hits Australian shores.
In a statement to the market, Macquarie spokesman Peter Lucas says the bank's listed Macquarie Fortress Notes fund and the unlisted Macquarie Fortress Fund are exposed to an unanticipated surge in volatility in the US credit market.
"The price movement we have seen in the last week has been unprecedented," Mr Lucas says in today's The Australian newspaper.
"We didn't expect this to happen."
Mr Lucas said the underlying assets remained "fundamentally healthy" but "supply demand imbalances" in the senior loans market, sparked by the collapse of the sub-prime mortgage market, was causing price volatility.
He said the average price of assets contained in the funds' portfolios had dropped four per cent during July. The previous biggest drop was 3.3 per cent but this occurred over five months in 2002.
- AAP
