TCF Targets RBA Cash Rate Plus 4% with $45.2m Entitlement Offer at $5.94 per Unit

Entitlement Offer Details and Strategic Objectives

360 Capital Mortgage REIT (TCF) has launched a significant capital raising initiative through a 1-for-1 non-renounceable entitlement offer priced at $5.94 per new unit. The offer aims to raise up to $45.2 million, with proceeds earmarked primarily for new loan investments in the Australian real estate market. Eligible unitholders as of 16 September 2025 will have the opportunity to participate, with an oversubscription facility allowing for additional subscriptions beyond entitlement. Any shortfall will be offered to wholesale and institutional investors.

Focus on Senior Loans and Portfolio Quality

TCF’s investment strategy continues to emphasize senior loan investments secured by first mortgages, which currently constitute 85.3% of the portfolio. The portfolio maintains a conservative loan-to-value ratio (LVR) of 67.7%, providing a substantial equity buffer exceeding 30%. This approach prioritizes capital preservation and income stability, with loans typically sized between $5 million and $30 million and terms averaging 12 to 18 months. The trust’s focus on middle-market residential developments and experienced borrowers underpins its disciplined lending philosophy.

Track Record and Performance Metrics

Since 360 Capital FM Limited assumed management in 2020, the trust has increased distributions by over 126%, delivering a historic return exceeding the target benchmark of the Reserve Bank of Australia (RBA) cash rate plus 4.0% per annum. Actual returns since inception have averaged RBA cash rate plus 4.85% per annum, with monthly distributions paid consistently. The trust boasts an 18-year track record with no capital loss or impairment across $440 million in private credit transactions, reinforcing investor confidence in its risk-adjusted lending model.

Market Context and Growth Prospects

The offer comes amid a backdrop of strong housing demand in Australia, driven by population growth and constrained supply. The trust’s strategy aligns with market needs by targeting loans to mid-market developers in capital cities and select regional areas. By increasing scale through this capital raise, TCF aims to enhance liquidity and relevance in the mortgage REIT sector, doubling its proforma market capitalization to approximately $90.3 million. This scale is expected to improve market presence and investment flexibility.

Risks and Considerations

Investors should note the non-underwritten nature of the entitlement offer, which introduces subscription risk. The trust also discloses comprehensive risk factors including market volatility, borrower default, valuation accuracy, interest rate fluctuations, and regulatory changes. While the portfolio’s senior loan focus mitigates some risks, the trust remains exposed to property market cycles and borrower creditworthiness. Forward-looking statements in the offer documentation emphasize the inherent uncertainties and the need for investors to conduct independent assessments.