AccretivPLUS TI Note

The AccretivPLUS TI Note, listed on the MERJ Exchange, offers investors an alternative fixed-income opportunity that has become possible due to persistent high U.S. interest rates. Notes have become popular amongst investors who are looking for an alternative to the high levels of uncertainty and volatility in equity markets. With 10-year Treasury yields expected to remain above 4.25% through 2025, institutional and high-net-worth investors are shifting toward private debt products for fixed returns and lower volatility.

Purpose and Uses

AccretivPLUS underlying buildings have senior debt in the capital stack sourced mostly from traditional banks. Most of these loans enjoy exceptionally low rates of interest because of the time that the rate was fixed on the acquisition of the building. It would make sense to raise additional debt from these institutions for purposes of installing new tenants, extending existing tenants or undergoing renovation or improvement of the buildings. This would result in the full loan undergoing a restructure aligning with current interest rates. In some instances, this would result in an increase in the interest on the senior debt from 3% to 7%.

The company intends to capitalize on market conditions and acquire new buildings at a discount, often requiring short closing periods. AccretivPLUS will acquire the building and raise the equity required to replace the mezzanine debt. The company may also use Note funds for this purpose. AccretivPLUS is raising these notes exclusively for the improvement of the underlying real estate of the Company, to advance its goal of growing the value of its portfolio of healthcare buildings.