DEBT AND EQUITY RAISING OVERVIEW
Equity The Manager is seeking to raise $4,450,000 for the Trust at an Issue Price of $1.00 per Unit with an anticipated date for Financial Close of Friday, 25 October 2024. The minimum number of Units an Investor can subscribe for is 50,000 making the minimum subscription amount $50,000. The Trustee will have the right to accept amounts that are different to the minimum investment/increments at its discretion. The equity raised as a result of the issue of the Interests under this Information Memorandum will be used to acquire the Property. The Trustee will have the right to, in its sole discretion, elect to accept subscriptions above or below the intended $4,450,000 provided the risk
Borrowings The Trust will have the power to borrow, and the Trustee will do so on behalf of the Investors in the name of the Trust. The Trustee will grant security over the Trust’s assets under normal commercial banking terms and conditions for loans of this type. Investors will not have any personal liability to the Debt Lender to repay any debts as the debt providers will only have recourse to Trust assets.
Trust debt structure The funding structure for the Trust on Financial Close will be based on a Debt Facility with an anticipated initial Loan to Value Ratio (LVR) of 55%. The anticipated LVR based on drawn debt post Financial Close is forecast to be approximately 50%. The Manager anticipates that the facility for the Trust will incorporate the following principal terms:
profile of the Trust and the forecast distribution to Investors will not be materially adversely affected. Where the Trustee accepts oversubscriptions, these funds will be deployed within the Trust in a manner determined by the Trustee. Transaction timing may be varied under certain circumstances, which could result in the date of Financial Close being extended for a period of time. Investors should be aware that Units in the Trust are issued prior to the unconditional Contracts being entered into and interest is not payable on Investor funds from the date of application to the date of Financial Close (or the return of funds to Investors if the transaction does not proceed to Financial Close).
Debt Lender
Anticipated to be a major financial institution regulated by the Australian Prudential Regulation Authority (APRA).
Debt Facility
$3,643,750
Term
3 years
Interest Rate
The anticipated pricing from the Debt Lender for the Properties is a margin of 1.61% over the 90 day bank bill rate. In total, as at the date of this Information Memorandum, the interest rate would equate to approximately 6.07% per annum. Our current adopted interest cost for the Property is set at 5.95% per annum (Year 1). The Manager is reasonably satisfied that the cash contingency of the Trust will be sufficient to cover potential interest rate rises over the short to medium term without materially adversely affecting forecast distributions to Investors. The following Securities will be provided by the Trust to the Debt Lender: First ranking mortgage over the Property; and A Personal Property Securities Register (PPSR) charge over the Assets of the Trust. The Debt Facility will be limited recourse, with the Debt Lender having recourse only to the Assets of the Trust.
KEY DATES FOR INVESTMENT
Monday, 23 September 2024
Information Memorandum distributed
Tuesday, 24 September 2024
Applications Open
Security
Application Forms to be submitted with a deposit amount equating to 10% of the subscription amount
Friday, 04 October 2024
Wednesday, 16 October 2024
Balance of cleared Investor Funds required
Friday, 25 October 2024
Completion of Property Acquisition and Financial Close
• Valuation; • Contract of Sale;
Conditions Precedent
Note: Investors should note that Applications will be accepted on a ‘first in first served’ basis. Confirmation of 10% deposit paid into the Trust’s lawyer’s trust account must also be submitted with your Application. Due to the level of Investor interest, the Trust may become fully subscribed earlier than Friday, 04 October 2024. *Financial Close is anticipated to be 7 days from exercise of the option document. For more information refer to Lease and Contract Summary .
• Satisfactory review of the Leases; and • Satisfactory review of the Trust Deed.
• Maintain an Interest Cover Ratio of not less than 1.5 times coverage; and • Loan to Value Ratio for the Debt Facility for the Trust will be no greater than 55% of the Forecast Trust Value.
Material Conditions
QUANTA TENNYSON STREET OFFICE TRUST | Information Memorandum
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