Council Investments May Prove Costly

Newcastle Herald

Wednesday October 29, 2008

By PAUL MAGUIRE

SINGLETON Council could lose a $500,000 investment which failed to pay interest in September.

The investment, known as a Zircon Finance Coolangatta AA collateralised debt obligation, is among six council investments that cost $5.5 million and which the council now value at less than $3.7 million because of the global financial crisis.

Coolangatta, which the council now values at just $183,250, was one of two that did not pay interest in September.

The other, $500,000 invested with Deutsche Bank Australia and now valued at $374,200, has resumed interest payments on a daily basis.

In a report to this week's council meeting, finance manager Anthony Egan said Coolangatta was due to pay almost $12,000 interest in September and the default may lead to the investment being "unwound".

He said he was still awaiting advice.

His report said the council had an investment portfolio which cost almost $40.6 million and was now valued at $38.9 million.

© 2008 Newcastle Herald

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