Entitlement Offer Could Dilute Holdings if Unitholders Don’t Fully Subscribe
360 Capital Mortgage REIT (ASX, TCF) has initiated a non-renounceable 1-for-1 entitlement offer priced at $5.94 per unit, aiming to raise approximately $45.2 million to fund new loan investments and expand its portfolio.
- 1-for-1 non-renounceable entitlement offer at $5.94 per unit
- Target raise of approximately $45.2 million to invest in new loans
- Offer includes oversubscription facility and shortfall offer
- New units rank equally and eligible for October 2025 distributions
- Focus on senior mortgage loans secured by Australian real estate
Entitlement Offer Details
360 Capital Mortgage REIT (ASX – TCF), managed by 360 Capital FM Limited, has announced a 1-for-1 non-renounceable entitlement offer of new units at an offer price of $5.94 per unit. The offer, which opened on 18 September 2025 and closes on 30 September 2025, aims to raise up to $45.2 million. Eligible unitholders registered as of 7.00pm Sydney time on 16 September 2025 can participate in the offer.
The offer price is set at the net asset value (NAV) per unit, representing a slight discount of approximately 0.7% to the closing price on 10 September 2025. This pricing strategy aligns with the trust's commitment to fairness and transparency for existing investors.
Use of Proceeds and Investment Strategy
The majority of the funds raised will be deployed into new loan investments currently under due diligence. This move is designed to diversify the trust’s loan portfolio further, maintaining its focus on senior mortgage loans secured by Australian real estate assets. The trust targets a return of the Reserve Bank of Australia (RBA) cash rate plus 4.0% per annum, a benchmark it has consistently exceeded since inception.
360 Capital Mortgage REIT emphasizes disciplined asset selection and risk analysis, focusing on senior first mortgage loans with an average loan-to-value ratio (LVR) of approximately 67.7%. The trust’s portfolio is diversified across residential, industrial, and retail sectors, with a strong emphasis on income generation and capital preservation.
Offer Mechanics and Investor Participation
The entitlement offer is non-renounceable, meaning entitlements cannot be traded or transferred. Eligible unitholders may subscribe for one new unit for every existing unit held and can also apply for additional units beyond their entitlement through an oversubscription facility. Any shortfall after this process will be offered to wholesale and institutional investors under a shortfall offer.
New units issued will rank equally with existing units and will be entitled to receive monthly distributions starting from October 2025. The trust has also implemented an off-market buyback mechanism to enhance liquidity for investors.
Risk Considerations and Regulatory Compliance
Investors should be aware of the key risks outlined by the trust, including market risk, borrower risk, valuation risk, interest rate risk, and regulatory risk. The trust operates under the regulatory framework of the Corporations Act 2001 and has leveraged ASIC relief to conduct this entitlement offer without a product disclosure statement.
Eligible unitholders are encouraged to read the full offer booklet and consult professional advisers to understand the implications of participating in the offer fully. The trust has also confirmed that the offer will not materially affect control of the trust, given its pro-rata structure and the current holdings of substantial unitholders.
Outlook
This capital raise positions 360 Capital Mortgage REIT to capitalize on new lending opportunities amid ongoing demand for Australian real estate credit. The trust’s focus on senior secured loans and disciplined risk management continues to underpin its strategy to deliver stable income and capital preservation for investors.
Bottom Line?
The success of this entitlement offer will be a key indicator of investor confidence in 360 Capital Mortgage REIT’s strategy and its ability to grow its loan portfolio amid evolving market conditions.
Questions in the middle?
- Will the entitlement offer achieve full subscription or trigger a significant shortfall allocation?
- How will the new capital deployment impact the trust’s loan portfolio risk profile and returns?
- What are the potential effects of rising interest rates on borrower repayment capacity and loan performance?