The share price of 360 Capital Total Return Fund (ASX: TOT) rose today after it announced an update, guidance and a share buy-back.
360 Capital Total Return Fund said that it had completed its acquisition of URB Investments and it has commenced a sale of the shares that URB owned. It has already sold $17.8 million and still holds $3.1 million of shares.
Another part of the update said that the fund's $8 million Coogee and $7.7 million Perth hotel loan investments have now been repaid, delivering a 15.1% and 16.8% rate of return per annum respectively. The fund's $100 million real estate loan portfolio now comprises only senior secured first and only mortgages with an average all-in interest rate of 9.8% and portfolio loan to value ratio of around 67% on a fully drawn basis.
360 Capital Total Return Fund also also announced that it has commenced the sales campaign for the Gladesville apartment asset. Recent sales within the area support sales prices approximately 26% above the fund's November purchase price.
Next, investors were reminded that it had jointly invested in a 19.9% stake of Velocity Property Group (ASX: VP7) for an investment of 2 cents per share, reflecting a 60% discount to the June 2019 NTA of 5.6 cents per security.
360 Capital Total Return Fund has now providded a $23.7 million residual stock loan over a completed project that is currently being sold down and a $10 million secured convertible note with a term of two years and an interest rate of 7% with a conversion price of 4 cents per security, a 28% discount to the NTA – conversion rights are subject to Velocity shareholder approval.
Management have decided to commence a buy-back because it's trading at an 11% discount to the unaudited core NTA of $1.16 per share. It will buy up to 6.7 million securities, or 10% of the units on issue.
360 Capital Total Return Fund re-iterated its forecast distribution guidance of 9 cents per unit, reflecting a forecast distribution yield of 8.5%.
It also expects to report for the December 2019 half-year: an operating profit of 4.5 cents per unit, NTA of $1.16 per unit and cash of $33.1 million with current receivables of $18.1 million.