No change to Sandhurst redemption policy

Bendigo and Adelaide Bank Managing Director Rob Hunt today announced there was no change in the redemption policy of the Group’s mortgage funds Sandhurst Select and Sandhurst Investment Common Fund.

“The assets backing the Sandhurst funds are cash and first mortgages predominantly over residential property,” Mr Hunt said.

“The underlying assets in the funds have been written to Bendigo and Adelaide Bank credit standards and continue to perform well, generating strong cash flows.

“The average loan-to-valuation ratio of the Sandhurst portfolio is very low. Consequently, borrowers have a high degree of equity in their properties.”

Mr Hunt said the Sandhurst Trustees funds were strongly supported with available liquidity facilities and there is no change to Sandhurst’s redemption policy or its ability to meet redemptions.

Mr Hunt said the funds had seen an increase in redemptions since the Federal Government announced a guarantee of deposits with approved deposit-taking institutions (ADIs). Sandhurst Trustees is not an ADI and its investors’ funds are not covered by the guarantee.

“The loss of confidence among investors in mortgage funds is particularly unfortunate and I am sure an unintended consequence of the Government guarantee for bank deposits,” Mr Hunt said.

“The Sandhurst funds are high quality investments which happen to fall outside the Government guarantee.”

“This is no reflection on the quality of the funds and investors can be confident that the funds remain in a strong position on a stand-alone basis.”