High-risk mortgage fund Angas Securities has announced that one-third of its loans are in arrears as it asks investors for additional funds.
Loans made by the Adelaide-based $280 million fund that are more than 90 days in arrears tripled in the six months leading up to December, reaching $72.3 million – with $33 million of those more than a year in arrears, according to The Australian reporter Anthony Klan.
The default rates facing Angas mirror increasing problems in the high-risk mortgage debenture industry, where many players are foundering as property developer borrowers fold amid struggling real estate markets.
Angas, which offers annual returns of around 8%, reports that $72.5m of loans it made to developers and other borrowers were more than 90 days overdue, up from $23.5m in June last year and $20m some 12 months earlier.
According to The Australian, Angas executive chairman Andrew Luckhurst-Smith says the company is comfortable with the arrears levels because Angas has a ‘very conservative’ lending criterion and would only lend "up to 70%" of a project's value in the case of ‘first mortgages’.
The loans made by the company are well secured, says Luckhurst-Smith.
"Angas has no concerns about recoverability, nor would our auditors, who have examined our loan book thoroughly and have consented to being named on our [latest] prospectus.”