Sydney - Thursday - October 23: (RWE Australian Business News) -...

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.