Does a slowing economy increase the risk of loan defaults in private debt?

Well-run private debt funds use rigorous scenario testing and real-time monitoring to mitigate risks. Historical net write-offs by banks peaked at just 0.68% during the GFC and were 0.04% in September 2024, demonstrating strong resilience across economic cycles.

Does a loan default always result in a credit loss?

No. Private debt investors are protected by their seniority in the capital structure. Senior debt holders get repaid first, before subordinated debt, preferred equity, and common shareholders. Covenants and controls act as early warning signals allowing lenders to engage with borrowers to mitigate financial loss.

Are all private debt managers the same?

No. Private debt managers differ significantly in scale, credit skills, and experience. Quality managers need sizable assets under management, bank-level credit skills, extensive networks, and the ability to directly originate and diversify loans across borrowers to achieve optimal outcomes.

Does commercial real estate debt put capital at risk in a property downturn?

Property owners face greater risk than lenders. With typical loan-to-value ratios of 60%, owners' equity acts as a buffer. Even if property values fall significantly, lenders can compel borrowers to restore their position or pursue asset sales to maximize recovery without necessarily incurring losses.

Are non-bank lenders lenders of last resort?

No. Competent private debt managers lend to quality companies and often compete with banks or work alongside them in lending syndicates. Post-GFC regulations requiring banks to hold more capital have created financing gaps that private debt fills for established companies with sound fundamentals.

Fund name changes for MXT and MOT

We inform investors of the fund name changes for both MXT and MOT effective 30 July 2021.

PREVIOUS FUND NAME	NEW FUND NAME
MCP Master Income Trust (ASX: MXT)	Metrics Master Income Trust (ASX: MXT)
MCP Income Opportunities Trust (ASX: MOT)	Metrics Income Opportunities Trust (ASX: MOT)

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The ticker codes for both funds (ASX: MXT and ASX: MOT) remain unchanged.

Please refer to the ASX announcements for further information regarding the name changes for MXT and MOT.

Why have the fund names been changed?

The above fund names have been changed to better align with our current corporate branding and to clearly identify Metrics as the investment manager of both funds (as opposed to using the MCP abbreviation).

What do the changes mean for investors?

Other than the change of name, nothing else has changed for investors and no further action is required. The above funds continue to be managed by Metrics Credit Partners and there are no changes to the investment objectives, strategy, or distribution frequency.

The relevant notifications have been provided to investors via the ASX as required and investors will see the new fund names reflected across all future investor communications.

Any questions?

If you have any questions or require further information please contact us on 1300 010 311 or invest@metrics.com.au

1 August 2021

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Email us
invest@metrics.com.au

1300 010 311
Mon-Fri 9:00 - 5:30