Offer

Offer 2017-12-08T17:36:50+00:00

Walsh & Company Investments Limited (ACN 152 367 649, AFSL 410 433), as responsible entity (Responsible Entity) for the US Masters Residential Property Fund (URF or Fund) (ARSN 150 256 161) is pleased to announce an offer of up to 3 million convertible step-up preference units (CPUs) to raise up to $300 million under a product disclosure statement dated 1 December 2017 (PDS).

URF seeks to provide investors with exposure to a diversified portfolio of US residential property with attractive rental income and potential for long-term capital growth.  From $69 million at the time of the IPO in 2011, URF and its controlled entities (Group) have grown assets in the portfolio to over $1 billion[1], and is now the largest Australian-listed property trust with a primary strategy of investing in US residential property.

Having achieved this growth, the Fund recently undertook a review of the existing strategy.  In order to position URF to continue to deliver strong returns and to provide long term value in varying market conditions, the next phase of URF’s strategy will have three key areas of focus:

  • complete the portfolio renovation pipeline and maximise rental income;
  • continue to drive cost efficiencies to maximise rental yields; and
  • optimise the capital structure.

The issue of CPUs forms part of this initiative, with the proceeds of the Offer to be used to fund the redemption (either in part or full) of URF Notes I, to improve both the structure and cost of the Group’s capital, and to diversify its funding sources. The proceeds will also provide additional resources to further accelerate the completion of the renovation pipeline, as well as general corporate activities.

Holders of URF Notes I have the opportunity to nominate to exchange their existing holdings of URF Notes I into a subscription for CPUs (Rollover) on a 1 to 1 basis. In addition, a priority offer (Priority Offer) of up to $50,000 (500 CPUs) is available for each Applicant who is a URF unitholder (Unitholder) or holder of either URF Notes I, URF Notes II or URF Notes III (URF Noteholder) at 5:00pm (AEDT) on the Offer Closing Date. An Applicant who is both a URF Unitholder and URF Noteholder is entitled to apply for up to $100,000 (1,000 CPUs) under the Priority Offer.

Investment opportunity and Key CPU terms:

  • a distribution rate of 6.25% per annum stepping up to 8.75% per annum from 1 January 2023 (if the CPUs do not convert into ordinary units in URF (Units) before that time) which is expected to be paid semi-annually;
  • priority over Units for distributions up to the distribution rate and on a winding up to the Issue Price and any accumulated unpaid distributions;
  • the ability for holders of CPUs (CPU Holders) to elect to reinvest distributions on the CPUs in Units issued at a 5% discount to market;
  • a ratio of conversion of CPUs into Units based on a 10-day volume weighted Unit price less a 2.5% conversion discount; and
  • depending on the tax position of the CPU Holder, and the tax position of the Fund, distributions may be treated as a reduction in the cost base of CPUs, rather than as income.

Key dates:

Date of PDS 1 December 2017
Opening date 8 December 2017
Expected closing date 5pm (AEDT) 18 December 2017
Expected issue date 22 December 2017

As at 31 October 2017

Risks:

Like all investments, an investment in CPUs and the Fund carries risks which may result in the loss of income or principal invested.  In addition to the general risks of investing, specific risks associated with investing in CPUs include, but are not limited to, risks of the distribution payment, no individual rights to redeem, conversion risk and liquidity risk. The risks associated with investing in the Fund include, but are not limited to, risk of US residential property market, concentrated geographic focus, foreign exchange risk and taxation risk.  For further information about the risks of investing in CPUs and the Fund see Section 5 of the PDS.

Before deciding to invest, prospective investors should consider the PDS in full and seek advice from their professional advisors if necessary. The PDS is available by accessing the link below or a hardcopy can be obtained for free by contacting the Responsible Entity on 1300 454 801 during the offer period.

Download PDS

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Walsh & Company FSG

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IMPORTANT INFORMATION:

The offer is being made under a PDS lodged with the Australian Securities & Investment Commission (ASIC) on 1 December 2017. The Corporations Act 2001 (Cth) prohibits the processing of applications to subscribe for CPUs under this PDS in the seven day period after the lodgement of the PDS. This period may be extended by ASIC for a further seven days.

This website may contain general advice. Any general advice provided has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, you should consider the appropriateness of the advice with regard to your objectives, financial situation and needs.

Not an offer in the US: This website does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The content on this website may not be distributed or released in the United States. The securities in the proposed offering have not been and will not be registered under the US Securities Act of 1933 (US Securities Act), or under the securities laws of any state or other jurisdiction of the United States.