Property-backed Secured Investment (PSI) continues to be our focus product and is a deal that is collateralized by a local Singapore property. This added security naturally carries less risk thus a lower interest rate in comparison to our other unsecured products such as Invoice Financing.

To address the gap for investors who prefer a collateralized investment with higher returns, we are introducing a tiering structure for selected Property-backed Secured Investment deals. This new arrangement comes with differences in priority when it comes to claims on the property (upon liquidation). Investors on a higher priority would naturally earn lower interest than the ones who rank lower.

Kindly note that the example below is just for illustrative purposes and the interest rates are not indicative of how an actual deal may be.

Tier

Priority on sales proceeds

Interest Rate

Repayment Structure

1

1st

5%

Monthly interest, full principal bullet paid at end of tenor

2

2nd

6%

Monthly interest, full principal bullet paid at end of tenor

3

3rd

7%

Monthly repayment of interest and potentially principal

In the above example, investors who invested in the Property-backed Secured Investment deal in the 1st Tier follows the usual repayment structure of this product where only interest is paid monthly with the principal repaid in a single lump sum at the end of the tenor. In the event the property needs to be liquidated, this group of investors would have first rights to the sales proceeds of the property to recover their investment.

The 2nd Tier of investors upon liquidation would only have access to the sales proceeds after the investors in the 1st Tier have recovered. Similarly, investors in the 3rd Tier would only recover after the investors in the 2nd Tier. As such, there is a possibility that investors in the 2nd and 3rd Tier may not recover in full. This is compensated by two features for investors in these tiers.

  • Lower tier investors would earn higher interest than the ones in higher tier

  • Repayment structure may include monthly repayment of the invested principal for Tier 3 whereas those in the 1st and 2nd Tier only get their principal at the end of the tenor.

We’ll like to highlight that at the point of underwriting, the total amount to be funded across all tiers would always be within the forced sell value of the property. Partial recovery for Tier 2 and 3 investors assumes the scenario where the liquidation occurs below forced sell value

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