Photo credit: Nick Lenaghan
This week on the front cover:
“Borders shut, flights cut as crisis grows”, The AFR
“Schools isolate students in danger of China virus”, The Australian.
“A year ago mortgage brokers faced losing their business. Today, as housing heats up, they’re ‘in the land of opportunity’ again. Financial advisers, not so much”, The AFR.
“Mallacoota firefighters lead city’s Australia Day parade”, The Age.
- Foreign visitors from China will no longer be permitted to enter Australia due to the outbreak of coronavirus in China (Michael Smith and Tom McIlroy, 1/2/2020, Australia bars foreign arrivals from China). The United States, Singapore and Mongolia have also imposed temporary restrictions on visitors who visited the country. Russia shuts its land border with China while Japan imposed restriction on visitors from Hubei. (Jake Rudnitsky and Evgenia Pismennaya, 31/1/2020, Russia Closes Border With China to People, Not Goods).
- Ouson (Chinese backed developers) has listed the World Trade Centre on the market through Savills and AsheMorgan is reported to be one of the interest parties. Acquired in 2017 from Abacus Group, KKR and Riverlee for $267.5 million, the current deal is estimated to pass $380 million. The World Trade Centre is located in Melbourne’s riverside precinct with significant redevelopments in the pipeline. This includes Mirvac’s planned build-to-rent apartment project at the former Melbourne Convention Centre and Riverlee’s Seafarers Place development at Northbank (the Seafarers Place development consists of a 5-star hotel, function centre and 150 residential apartments) (Nick Lenaghan, 30/1/2020, AsheMorgan eyes up World Trade Centre).
- Despite controversies about loopholes in LIT fees and commission structure as well as the riskiness of its underlying assets, fund managers continue to tap into the LIT market for primary and secondary capital raisings. Listed Investment Trusts (LIT) are closed-ended vehicles incorporated as trusts. LIT distributes surplus income to investors and can provide investors with a steady income stream.
- Metrics is reported to be seeking an additional $638 million, taking its MCP Master Income Trust (ASX:MXT) FUM to almost $2 billion. MXT invests in corporate loans in Australia and makes a small allocation to commercial real estate loans through its unlisted real estate debt fund. The fund has written more than 150 corporate loans to date. The fund targets a return of cash rate plus 3.25% p.a. (Jonathan Shapiro, 28/1/2020, Metrics debt fund nears $2b as it taps LIT market). The fund is currently trading above its net asset value.
- Neuberger Berman is seeking an additional $750 million for its NBI Global Corporate Income Trust (ASX:NBI) (Jonathan Shapiro, 21/1/2020, Neuberger Berman kick-starts debt fundraisings). The fund has a target return of 5.25% and invests in high yield corporate bonds globally (with significant positions in US and France). The average credit rating of the portfolio is BB- and its top 5 sector exposures are Media (9.8%), Services (9.4%), Telecommunications (8.5%), Healthcare (6.8%) and Leisure (6.2%).
- Pimco has confirmed plans to launch its first closed-ended corporate debt listed investment trust by March 2020. The fund’s investment strategy includes targeting less liquid corporate debt opportunities and will be managed by Dan Ivascyn, Rob Mead and Alfred Murata.
- MaxCap and Metrics have provided a $210 million a senior debt loan to fund the acquisition and construction of Eynesbury Estate by Resimax Group. The transaction represents one of the larger non-bank senior debt deals in Australia. Eynesbury Estate is 35km west of Melbourne CBD, located between Wyndham and Melton in Melbourne’s growth corridor. The project is planned to deliver over 10,000 residential lots and with an estimated gross realisable value of over $2 billion.