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.

Metrics Income Opportunities Trust (MOT) Unit Purchase Plan (UPP) closes Thursday 30th September

MOT Eligible Unitholders (as defined in the Unit Purchase Plan Booklet) have until Thursday 30th September to take advantage of the UPP offer to increase their investment in MOT at a price close to the net asset value (NAV) of the fund.

If you are an Eligible Unitholder of MOT, you can apply for up to $30,000 worth of new ordinary units at $2.03 per unit until 30 September, without incurring brokerage or other transaction costs.

The UPP opened on 6 September 2021 and closes 5:00pm (AEST) on Thursday 30 September 2021. Units will be issued on Tuesday 5 October 2021.

The offer is open to Unitholders with a registered Australian or New Zealand address, on the register at 7:00pm (AEST) on Wednesday, 25 August 2021, who should have received documentation by email or mail sent on 6^th September 2021.

To view the personalised application form, together with the UPP offer documents, log in to the Automic investor portal. The terms and conditions of the UPP offer are outlined in the Unit Purchase Plan Booklet which can also be found on the ASX website.

If you require further information about the UPP , or need assistance accessing the documentation, please contact Automic on 1300 288 664 (within Australia), +61 2 9698 5414 (outside Australia) or at metrics@automic.com.au between 9:00am and 5:00pm (AEST).

This communication and units in the Metrics Income Opportunities Trust (MOT) are issued by The Trust Company (RE Services) Limited ABN 45 003 278 831 AFSL 235 150 (Perpetual) as responsible entity of MOT. Metrics Credit Partners Pty Ltd ABN 27 150 646 996 AFSL 416 146 (Metrics) is the investment manager of MOT. The information above is of a general nature only and has been prepared without taking into account your objectives, financial situation or needs. Before making an investment decision in respect of MOT, you should consider the current product disclosure statement of MOT and MOT’s other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au and assess whether MOT is appropriate given your objectives, financial situation or needs.If you require advice that takes into account your personal circumstances, you should consult a licensed or authorised financial adviser. Neither Perpetual nor Metrics guarantees repayment of capital or any particular rate of return from MOT.

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