Structured Finance payments halt exposes First Step investors

Money Managers’ First Step clients have seen their investments take another misstep with Structured Finance’s halt on repayments yesterday.

Financial Trust, which invested First Step funds as trustee for the First Step trusts, holds the vast majority of outstanding Structured Finance debenture stock.

The spokesman for First Step’s trustee Calibre, Edward Russell, confirms that about $30 million is owed to the funds.

The last First Step accounts – which predicted a nearly $100 million shortfall to investors – did not make any provisions for losses on the investment.

Financial Trust’s debenture holding came about as the result of a deal struck in 2007, giving the Trust $100 million debenture stock in lieu of repayment of a debt owed by Structured Finance.

Structured Finance’s latest prospectus states that the remaining debt to Financial Trust was extended three times and was due to mature on June 19 this year.

Structured Finance has a number of connections with Money Managers – its debentures were sold through the advisory chain.

Director Martin Reesby also runs another finance company, Fidelity, alongside New Zealand Funds Management directors and Money Managers shareholders Gerald Siddall and Russell Tills.

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