TMBAM Eastspring making progress to return assets to unitholders after fund closures

In three months, 34 – 55% of the funds have been liquidated with 6 to 8 payments made to unitholders
To preserve value for investors we have sought and have been granted a 90-day extension
Bangkok, July 2, 2020 – TMBAM Eastspring has today provided an update on the liquidation of the four fixed income funds that were closed at the end of March 2020.

TMBAM Eastspring has made more than THB68 billion of repayments to unitholders, equivalent to 34 - 55% of assets in each fund since the fund closures. To best protect the interests of all unitholders, the fund house has sought and received approval from the Securities and Exchange Commission (SEC) for a 90-day extension of the liquidation period to ensure the orderly sale of assets, while preserving value for investors.

Mr. Boonchai Kiattanavith, Interim Managing Director of TMBAM Eastspring and Managing Director of Thanachart Fund Eastspring, said, “TMBAM Eastspring closed four fixed income funds amidst the considerable market turmoil created by the COVID-19 pandemic that resulted in unprecedented spreads and unusually high outflows.”

“During the month of March, we witnessed record emerging market bond outflows equivalent to 10% of global AUM and a sharp increase in local bond spreads. Regretabbly and due to the unprecedented and extreme volatility, we had to make the difficult decision to suspend and close the four funds. This decision was made in the best interests of our investors.

“It is important to note that there was no default in the underlying assets of these funds, all of which were of investment grade quality. These actions were necessary to allow the orderly sale of assets and to preserve value for our investors,” said Mr. Kiattanavith.

Mr. Kiattanavith stated that to date, TMBAM Eastspring has been able to maintain the value of assets invested by unitholders to close to that on the last trading day.

“Putting this into context, whilst it was regrettable that we had to terminate the funds we are focusing on delivering the best outcomes for our clients and unitholders,” added Mr. Kiattanavith.

The value received from the assets sold in all four funds is higher by approximately 0.90% on average compared to the carried value of the assets on the last trading day. As of 26 June, the estimated NAV of the remaining assets combined with the repaid amount of three funds, TMB Thanaplus Fund, TMB Bond Fund and TMB Aggregate Bond Fund, remains higher than the NAV on the last trading date. Meanwhile, the estimated NAV of the remaining assets combined with the repaid amount of TMB Ultra-Short Bond Fund is lower by approximately 0.5%, compared to the NAV on the last trading date.

“Overall, bond prices have improved from the last trading day of these funds, allowing fund managers to gradually liquidate part of the portfolio at a fair and reasonable price. However, market conditions have not fully recovered to pre-COVID-19 levels. Accelerating the liquidation process of the remaining THB80 billion in the four funds, without consideration for timing and market liquidity could result in significantly lower than expected proceeds for unitholders, which we believe is not in the best interests of our clients,”said Mr. Kiattanavith.

In order to protect the interests of unitholders and to receive a fair and reasonable price from the sales of assets, TMBAM Eastspring has requested and received an extension from the SEC of the liquidation period for another 90 days, from the previously scheduled liquidation completion date of July 9, 2020 to the new date of October 7, 2020. Since the fund closures, TMBAM Eastspring has not charged any fees in relation to the management of these assets.

These actions have no impact on the management of other funds managed by TMBAM Eastspring in Thailand.

TMBAM Eastspring has been committed to providing investors with regular information on markets, our funds and our investment approach during this time of heightened market volatility.

Unitholders who are looking for liquidity support are welcome to apply for a special, low interest rate loan from TMB Bank, the key partner of TMBAM Eastspring . The eligibility period for the liquidity support scheme will include the extended settlement period, and unitholders can use their investment units as collateral for the loan.

TMBAM Eastspring customers can keep up to date with the latest news and 24-7 updates via our online channels, including our official website (https://www.tmbameastspring.com/), LINE Official Account, YouTube and TMBAM Fundlink Online. Should you have any enquiries or require further information, please contact our customer service center at 1725 during business days from 8:30 – 20:00 hrs. and on weekend or public holidays from 9:00 – 17:00 hrs.

Note to the news editor

TMB Thanaplus Fund (TMBTHANAPLUS) has already repaid 43% (compared to the NAV on the last operating day on 25 Mar 2020)
Estimated NAV (as of 26 June 2020): 12.1849 baht

TMB Bond Fund (TMBBF) has already repaid 34% (compared to the NAV on the last operating day on 25 Mar 2020)
Estimated NAV (as of 26 June 2020): 12.7599 baht

TMB Ultra-Short Bond Fund (TMBUSB) has already repaid 46% (compared to the NAV on the last operating day on 24 Mar 2020)
Estimated NAV (as of 26 June 2020): 10.5023 baht

TMB Aggregate Bond Fund (TMBABF) has already repaid 55% (compared to the NAV on the last operating day on 24 Mar 20)
Estimated NAV (as of 26 June 2020): 11.2576 baht
About Eastspring Investments:

Eastspring Investments is a leading Asia-based asset manager that manages over USD 241 billion (as at 31 December 2019) of assets on behalf of institutional and retail clients. Operating in Asia since 1994, Eastspring Investments is the Asian asset management business of Prudential plc, an international financial services group, and has one of the widest footprints across the region*. We provide investment solutions across a broad range of asset classes including equities, fixed income, multi asset solutions and alternatives and are committed to delivering high quality investment outcomes for our clients over the long term. Eastspring Investments is a signatory to the United Nations-supported Principles for Responsible Investment (PRI), a voluntary program which encourages best practice in environmental, social and corporate governance issues.