THE sale of assets that underpin five of Eurobodalla Shire Council’s collateralised debt obligations (CDOs) resulted in it receiving a payment of $3.4 million last month, according to a report to the February Finance and Services Committee meeting yesterday.
The report reveals that council has recovered an additional $1.4 million over the CDOs current book value of just over $2 million. It also states that over time council’s original portfolio investment was $22 million and that just over $20.3 million of that has come to term.
Of the CDOs that have come to term, after allowing for the return of the principal and interest received on the investment, general manager Rob Noble said council has reported a loss of $358,921.
“There are still three risky, outstanding CDOs remaining and these are due to mature in the next three years,” Mr Noble said.
“If they were sold today we have been advised their market value is $147,000 but the CDOs have earned $500,000 in interest. Council has decided to continue to hold them until they mature.”
Mr Noble says council is still involved in legal action to recover losses from its CDOs.
“There are two legal cases currently in progress. The Rembrandt case has had final orders issued but it is not clear what, if any, monies will be returned. The Paladin case has not yet been finalised,” Mr Noble said.