Lunar announces mandatory redemption of notes with no payment

By Ashley Montgomery

Kansas City, Kan., Feb. 7 - Lunar Funding V PLC issued a notice of mandatory redemption for no payment on its secured asset-backed notes due 2053.

The affected notes are €4.25 million of series 2005-16 secured asset-backed notes due 2053 linked to $5 million class D secured floating-rate credit-linked notes due 2053 of Marc CDO I plc and €11.05 million of series 2005-17 secured asset-backed notes due 2053 linked to $13 million class C secured floating-rate credit-linked notes due 2053 of March CDO I plc.

According to the notice, on Dec. 9, Marc CDO I plc said that it was obliged to redeem its class D notes on Dec. 22 due to an early termination date occurrence.

However, Marc was unable to make any payment on the notes because of claims ranking ahead of the notes. This resulted in the extinguishment of its obligation and the noteholders' rights to payment.

As a result, according to the indenture agreement, Dec. 22 was also the early redemption date for Lunar's series 2005-16 and 2005-17 notes and the redemption amount was zero.

Lunar will not pay any amount on the notes and the notes will be canceled and delisted, the notice said.

Lunar Funding, a subsidiary of Deutsche Bank AG, is based in Dublin.

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