For Accredited Investors Only
SDAX launched an opportunity to participate in a Working Capital Loan to a Borrower whose principal activity is the leasing out of co-living spaces.
About the Issuer and Loan Purpose
The Borrower has total outstanding loan obligations of S$5.7 million with other financiers as of Jan’22. The loans are property loans for the purchase of properties for its co-living business and short-term unsecured working capital loans.
- Strong income stream for interest servicing: The Borrower’s portfolio of hospitality assets for its co-living business is generating strong occupancy of more than 90% as of February 2022. Demand is expected to continue trending up as Singapore relaxes its border restrictions. Return of foreign students and expatriates will also contribute to the demand for the rooms.
- Newly secured projects: The Borrower has recently expanded its room count with a new property at Mohamed Sultan Road which is currently fully leased out. Its next project in the City area is due to be fully operational in July 2022. All projects have been self-funded by the Borrower so far.
- Pipeline projects: The Borrower is in talks with several major developers and asset owners to operate approximately another 400 rooms in various locations in Singapore. If successful, its total room inventory will be just under 800 rooms. From 2023, the Borrower has plans to expand into Japan and USA.
- Security package: The loan will be secured by a 2nd charge over a property where SDAX has the 1st charge for a senior property loan), as well as a charge and assignment over rental proceeds account. In addition, there will also be a personal guarantee by the sole shareholder.
What would you gain or lose in different scenarios?
- Best Case Scenario
- Investor gets to make a return based on the agreed interest rate offered in addition to the investment principle committed to participate in the Term Loan Facility.
- Worst Case Scenario
- In the event of default, recovery from the outstanding loan amount will be by way of liquidating assets that are being pledged as security for the Term Loan Facility.
Investor Proﬁle for this issuance should be MODERATE.
The nature of the investment is MODERATE.
Risk & Reward involved with the investment is MODERATE.