TIN securities build in the pre-emptive right, the right to receive the security’s yields (returns + mark-up in price) and the right to participate in the Bondholders’ Meeting with voice-right and voting-right.
The preferential right to underwrite minimum 90% of the TIN securities in the new Tranches aimed at not losing share in the vehicle. In those Tranches that contemplate payment in kind will be 100% of the remaining Securities after payment in kind.
The TIN operations allowed are: Sale & Lease Back (purchase an asset and lease it to the seller), Sale with Tenant (purchase an asset including the existing lessees), Build to Suit (build under an existing lease contract an asset tailored to the lessee’s needs, without assuming the construction risk at any time), new developments (under alliances with builders, buy real properties in construction with a lease contract at the sale, without assuming the construction risk at any time), and other operations on stabilized assets.
TIN Universalidad may take on debts for the purchase of real estate assets; for maintenance and repair, and Capex; for refurbishing works and for temporary liquidity requirements for operational expenses.
Universalidad TIN may take on debts through bank loans, capital lease, issue of credit-backed securities, transitory liquidity operations, and other means approved by the Board of Directors.
The debt cap is 40% of the assets value, the liens may be for up to 40% of the real estate assets and must be authorized by the Board of Directors. Exceptions are the operations for less than 2% of the Assets values.
The risks associated with the investment in TIN securities are the tenant risk, the asset risk, the vacancy risk, and the geographic and economic risk.
The tenant risk is mitigated through policies on A/R and credit risk, with the requirement of guarantees at the contract’s signature or insurance policy, and through a constant and direct contact with the tenant.
The asset risk is mitigated by means of the budget per real property; a 10-year business plan per real property; monitoring the budget implementation; recurrent investment in maintenance and improvement; yearly appraisals; insurance and permanent activity of experts towards deciding the times of entry and exit or the real properties.
The vacancy risk is mitigated by geographic diversification, type of real estate, economic sector, lessee, and maturity. The valuation models incorporate vacancy cycles. It may also be mitigated through insurance, requirement of guarantees from the lessees and strict exist clauses in the lease agreements.