Lifemark has issued a notice to bondholders declaring that several bonds underpinning Keydata plans have defaulted on income payments.
The firm informed bondholders of the development on March 2 and Keydata administrator PricewaterhouseCoopers confirmed it will affect coupon payments for all 23,000 Keydata Lifemark investors, who have around £349m invested.
Lifemark suspended income payments to investors in order to preserve liquidity and maintain payments of insurance premiums under existing policies.
It submitted an application to Luxemburg regulator Commission de surveillance du sec-teur financier on January 31 to change the terms and conditions of existing bonds to zero coupon bonds and avoid having to make interest payments.
KPMG Advisory in Luxembourg was appointed last Nov-ember for three months. This was extended by a further six months in February to allow directors to develop a restructuring plan for Lifemark and resolve liquidity problems.
Vintage Financial director Geoff Hartnell says: “Over the next few weeks, there will be different proposals put forward that will need to be given the green light by the Luxemburg regulator and put to bondholders. It will be a question of whether investors are satisfied with the risk and reward to capital and if the directors feel it is in the best interests of the fund.”