360 Capital Mortgage REIT Launches DRP with Units at Net Asset Value
360 Capital Mortgage REIT has introduced a voluntary Distribution Reinvestment Plan allowing unitholders to reinvest monthly distributions into additional units at net asset value without transaction costs. This move aims to enhance investor returns while maintaining capital preservation and transparency.
- Launch of voluntary Distribution Reinvestment Plan (DRP)
- Units issued at Net Asset Value with no brokerage or transaction fees
- Monthly distributions eligible for reinvestment
- Flexible full or partial participation options for unitholders
- Focus on stable income, capital preservation, and attractive yield
Introducing the DRP – A New Investment Option
360 Capital FM Limited, acting as the responsible entity for the 360 Capital Mortgage REIT (ASX – TCF), has announced the establishment of a Distribution Reinvestment Plan (DRP). This plan offers unitholders a streamlined and cost-effective way to reinvest their monthly cash distributions into additional units of the Trust. Importantly, units issued under the DRP will be priced at the Trust's Net Asset Value (NAV) as of the end of each month, with no brokerage fees, commissions, or other transaction costs applied.
How the DRP Works
Participation in the DRP is entirely voluntary, allowing investors to choose whether to reinvest all or part of their distributions. Unitholders can elect full or partial participation, providing flexibility to tailor their investment strategy. For those who do not provide bank details for cash distributions, the Responsible Entity will automatically reinvest their distributions after due notification, ensuring no distributions remain unallocated.
The DRP units will rank equally with existing units, participating fully in future distributions. Pricing is based on the NAV at the end of the distribution month, ensuring transparency and fairness in unit valuation. Statements detailing distribution calculations and unit allocations will be provided after each monthly distribution.
Strategic Benefits for Investors
360 Capital Mortgage REIT emphasizes several key benefits for investors opting into the DRP. The Trust targets stable and consistent monthly income, underpinned by a portfolio focused on senior loan investments secured primarily by first mortgages. This capital preservation approach is complemented by full transparency, with all loan exposures and terms disclosed to unitholders.
The Trust aims for an attractive yield, targeting the Reserve Bank of Australia cash rate plus 4.0% per annum. With an experienced real estate manager boasting an 18-year track record and a history of $440 million in private credit transactions without capital loss or impairment, the DRP offers a compelling opportunity for investors seeking income growth and capital stability.
Looking Ahead
The Responsible Entity retains discretion to modify, suspend, or terminate the DRP at any time, reflecting a flexible approach to managing the plan in line with market conditions and investor interests. Unitholders are encouraged to carefully review the DRP booklet and consult financial advisors to determine if participation aligns with their investment objectives.
As the DRP rolls out, market participants will be watching uptake levels and the impact on the Trust’s capital structure and distribution yield. The plan’s success could signal a broader trend among mortgage REITs seeking to enhance investor engagement and capital efficiency.
Bottom Line?
The DRP launch marks a strategic step for 360 Capital Mortgage REIT, potentially reshaping unitholder engagement and income growth dynamics.
Questions in the middle?
- What level of unitholder participation will the DRP attract in its initial months?
- How might the DRP affect the Trust’s unit price and liquidity on the ASX?
- Could future amendments to the DRP introduce minimum or maximum participation thresholds?