26th July 2022
Dear Investors,
We are pleased to provide this investor update with respect to the ASCF Private Fund.
Since our last quarterly update, the fund has continued to perform strongly, and we would like to take this opportunity to provide you with detailed information on each of the investments in the fund as at 30th June 2022.
Key Fund Information
Funds Under Management as at 30th June 2022 – $27,755,716.84
Unit Price as of 30th June 2022 – $1
Income Distribution for June 2022: Paid
Fund Investments
The fund, via its wholly-owned sub-fund Australian Mortgage Finances Services Fund
(AMFS), has undertaken several investments since inception under its mandate as per below:-
ASCF High Yield $17,144,056.54 (refer note 1.)
ASCF Managed Investments Pty Ltd C Class Notes $3,000,000 (refer note 2.)
ASCF Managed Investments Pty Ltd C Class Notes $4,040,000 (refer note 3.)
Direct Loan Investments $3,176,560.04 (refer note 4.)
Cash at Bank ASCF Private $390,231.97
Cash at Bank AMFS $182,027.62
Note 1. ASCF High Yield
AMFS currently has $17,144,056.54 invested in ASCF High Yield Fund, a retail fund managed by Australian Secure Capital Fund Ltd. AMFS, as a wholesale investor, receives a preferential rate of 8.60% per annum paid monthly from the fund due to the amount invested.
All interest payments have been made on time and in full by ASCF High Yield to AMFS at the prescribed rate on the due dates.
We expect the audited financials for ASCF High Yield Fund for the financial year ended 30th June 2022 to be available by the 30th September 2022, at which time a copy will be provided to you.
For further information concerning ASCF High Yield Fund, please refer to the Product
Disclosure Statement by clicking here.
Note 2. ASCF Managed Investments Pty Ltd C Class Notes
ASCF Managed Investments Pty Ltd (ASCFMI) is a part of the ASCF Group of Companies and issued a $35m bond in September 2018 by issuing A, B and C Class Notes which were fully subscribed.
A copy of the IM for ASCF Managed Investments Pty Ltd is available by clicking here.
ASCF Private, via its sub-fund AMFS, acquired the C Class notes on the 14th of September 2021 for a consideration of $3,000,000 at par value. These notes currently earn 15% per annum, payable monthly by the Mortgage Capital Australia Trust, which acts as the service entity to the ASCF Group. This transaction was foreshadowed in the ASCF Private Information Memorandum under clause 3.2(b).
Since the completion of the transaction, all interest payments have been made on time and in full by the Mortgage Capital Australia Trust to AMFS at the prescribed rate on the due dates.
Note 3. ASCF Managed Investments Pty Ltd C Class Notes
On the 7th December 2021, ASCF Managed Investments Pty Ltd issued additional C Class notes totalling $4,040,000. On the same day, it redeemed the B Class notes then on issue totalling $4,000,000.
These notes were issued on the same terms as the existing C class notes. The notes were acquired by AMFS and earn interest of 15% per annum payable monthly by the Mortgage Capital Australia Trust.
Since the completion of the transaction, all interest payments have been made on time and in full by the Mortgage Capital Australia Trust to AMFS at the prescribed rate on the due dates.
The audited financials for ASCF Managed Investments Pty Ltd for the financial year ended 30th June 2021 are available by clicking here, and we expect the audited financials for the financial year ended 30th June 2022 to be available by the 30th October 2022, at which time a copy will be provided to you.
The loan book for ASCF Managed Investments Pty Ltd continues to track well and aligns with the prior year’s performance.
Note 4. Direct Loan Investments
AMFS does not intend to originate new loans at this point, but rather acquire via assignment loans that are in default from the ASCF retail funds and ASCF Managed Investments Pty Ltd at reasonably conservative loan to valuation ratios.
The benefit of acquiring defaulting loans is that the interest rate applicable to these loans is much higher than the standard rate charged to borrowers who pay their interest on time.
The benefit of acquiring defaulting loans is that the interest rate applicable to these loans is much higher than the standard rate charged to borrowers who pay their interest on time.
Listed below are the details of the direct loan investments made by AMFS to date.
Loan No. 1
| Loan Assignment Date | 11th March 2022 |
| Loan security | 1st registered mortgage |
| Current Loan | $1,864,638.38 |
| Valuation | $4,000,000 |
| Estimated current LVR | 46.60% |
| Standard loan interest rate | 15% p.a. |
| Default loan interest rate | 30% p.a. |
| Property details | 10 lot residential subdivision Old Beach, Tasmania. |
On the 11th of March 2022, AMFS made its first direct loan investment by accepting an assignment of a defaulting loan from ASCF Managed Investments Pty Ltd for a total consideration of $1,534,611.49.
The assignment grants AMFS 1st mortgage rights over a Development Approved 10 lot subdivision in Tasmania, which the borrower never completed.
Each lot is expected to sell for between $350,000 to $400,000 on completion. The majority of the subdivision work has been completed and paid for and we expect titles to issue in the next month.
A marketing agency has been appointed to commence selling the lots, and we expect the development to be completed, and the loan, including all interest and costs, to be repaid in full prior to year-end.
Loan No. 2
| Loan Assignment Date | 1st June 2022 |
| Loan security | 2nd registered mortgage |
| Current Loan | $202,530.33 |
| Valuation | $1,300,000 |
| Estimated current LVR | 50.57% |
| Standard loan interest rate | 18% p.a. |
| Default loan interest rate | 36% p.a. |
| Property details | 2.64 ha vacant land Avoca Beach, NSW |
The borrower is currently arranging a refinance of the loan.
Loan No. 3
| Loan Assignment Date | 27th June 2022 |
| Loan security | 1st registered mortgage |
| Current Loan | $1,109,391.33 |
| Valuation | $1,530,000 |
| Estimated current LVR | 72.5% |
| Standard loan interest rate | 18% p.a. |
| Default loan interest rate | 36% p.a. |
| Property details | Residential house Forest Hill, Victoria |
We are currently in the process of taking possession of the security property and arranging to list the property for auction.
We will continue to provide additional updates with respect to the ASCF Private Fund every quarter, but should you have any queries or questions in the interim, please do not hesitate to contact me directly.
Regards,
Filippo Sciacca
Director
Investor Relations, Asset Management & Compliance – Australian Secure Capital Fund Ltd