The issue price of the New Shares will be announced separately on or around 25 April 2018 (the “Placing Price”). The Placing will be NAV accretive to existing shareholders, accordingly the Placing Price will be set at a price which is at a minimum greater than the existing NAV plus the costs of the Placing.
Stifel Nicolaus Europe Limited (“Stifel”) is acting as financial adviser and sole bookrunner to the Company.
Robert Jennings, Chairman, said:
“Since our launch three years ago, we have seen the Company's portfolio grow five-fold as the only listed fund with an exclusive focus on global economic infrastructure debt investments. As a result of our work to date, the Company has constructed a cash generative, highly diversified portfolio with an attractive level of dividend and good pipeline of current investment opportunities.
We believe that now is an opportune time to issue new equity for a fund investing in debt instruments in the infrastructure sector, in particular for our fund with its characteristics of short-life, non PFI debt, with low reinvestment risk. The proposed Placing will enhance our ability to capitalise on the increasing demand for infrastructure debt investments and create further value for our shareholders.”
NAV and Portfolio update
The Company has today separately announced that its unaudited cum income NAV for the period ended 29 March 2018 was 101.32 pence per ordinary share (the “Unaudited NAV”). As at 29 March 2018 the Company's invested portfolio comprised of 36 private debt investments and 20 infrastructure bonds collectively valued at £722.3 million across 8 sectors and 23 subsectors (the “Invested Portfolio”). The Invested Portfolio excludes any undrawn commitments or unsettled investments.
The Invested Portfolio had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.2% and a weighted average life of approximately 5.1 years. The weighted average purchase price of the Company's Invested Portfolio was approximately 95.1% of its par value. Investments which are pre-operational represented 17.9% of total assets.
Private debt investments represented 79.3% of the Invested Portfolio and 64.3% of it comprised floating rate assets. The Invested Portfolio comprised 56.5% of senior ranked debt, 37.0% of mezzanine debt and 6.5% of HoldCo Debt. On average, the Invested Portfolio had a Loan to Value of approximately 69.0%.
Approximately 39.6% of the Invested Portfolio consisted of investments located in the US. The other represented regions include the UK, Europe, and Australia/New Zealand, comprising 28.6%, 23.9%, and 7.8% of the Invested Portfolio, respectively.
As at 29 March 2018, approximately 94% of the Invested Portfolio consisted of either Sterling assets or was hedged back into Sterling.
The Invested Portfolio was exposed to the following sectors:
|
Sector |
% of Invested Portfolio |
|
Transport |
17.7 |
|
Transport assets |
10.3 |
|
Utility |
14.3 |
|
Power |
9.4 |
|
Renewables |
10.7 |
|
TMT |
10.3 |
|
Accommodation |
10.6 |
|
Other* |
16.6 |
*Other includes private hospitals (5.8%), residential infrastructure (4.8%), industrial infrastructure (2.9%), alternative fuel (1.8%) and PFI (1.4%)
As at 29 March 2018, the Company had undrawn commitments and 3 additional investments which are in the process of settlement, collectively valued at £107.7 million. Including these undrawn commitments and unsettled investments would result in a portfolio value of £830.1 million as at 29 March 2018 (the “Total Portfolio”).
Use of proceeds and pipeline of investment opportunities
As at 13 April 2018, being the latest practicable date, the Company had substantially deployed its equity capital and drawn £73.6 million (Sterling equivalent as at 13 April 2018) from its £100 million multi-currency leverage facility with The Royal Bank of Scotland International Limited (the “Company Facility”).
In addition to this, the Company had £43.7 million of committed investments which will be funded from the remaining headroom from the Company Facility of £26.4 million, and from investable cash of £23.1 million. Additionally, £36.4 million of the Invested Portfolio will mature in 6 months and an additional £26.9 million will mature in 12 months (excluding any early repayments of investments).
The Investment Adviser continues to see a strong pipeline of currently available investment opportunities meeting the Company's investment criteria. The proceeds from the Placing will be used to repay debt outstanding under the Company Facility.
Company Strategy
The Company is focused on a range of investment-grade jurisdictions, which allows its Investment Adviser the flexibility to find investment opportunities in markets where its capital can receive an attractive yield whilst maintaining geographical diversity.
The Company invests principally in economic infrastructure assets, targeting transactions that are secondary sales (bank deleveraging) or refinancings of existing capital structures. The Company has strict industry and single borrower diversification criteria in place with rigorous and regular monitoring of its investments.
The investments target senior, mezzanine and junior debt in order to generate attractive risk-return characteristics.
Full details of the Company's investment objective and policy can be found in the Company's previous prospectus that was published on 3 May 2017, a copy of which is on the Company's website.
Benefits of the Placing
The Board believes the Placing will confer the following benefits for shareholders and the Company:
· it will provide additional capital which will enable the Company to pay down its existing debt and pursue new investment opportunities in the market in accordance with the Company's investment policy;
· an opportunity to further diversify the Company's investor base, while enabling certain existing shareholders to subscribe for New Shares;
· the Placing will provide a larger asset base for the Company over which its operating costs may be spread, thereby reducing the Company's ongoing charges further; and
· the market capitalisation of the Company will increase following the Placing and it is expected that the secondary market liquidity of the ordinary shares will be enhanced accordingly.
Further details of the Placing
The issue of the New Shares will take place after the expiration of the Company's existing Placing Programme and will be undertaken under the Company's existing general authority to dis-apply pre-emption rights as approved by shareholders on 19 July 2017 for up to 72,800,000 New Shares, representing an aggregate amount of less than 10% of the ordinary shares from time to time in issue. A prospectus is not required in respect of the Placing.
Application will be made for the admission of the New Shares to the premium segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange's main market for listed securities.
Participation in the Placing will only be available to persons in member states of the EEA who are qualified investors as defined in article 2.1(e) of the Prospectus Directive (“Qualified Investors”).
Qualified Investors should communicate their firm interest to their usual sales contact at Stifel. The decision to allot any New Shares to any Qualified Investors shall be at the discretion of the Company and Stifel. The Company reserves the right, after consultation with Stifel and the Investment Adviser, to scale back applications under the Placing at their absolute discretion in such amounts as they consider appropriate.
By choosing to participate in the Placing and by making an oral and legally binding offer to subscribe for New Shares, investors will be deemed to have read and understood this Announcement and any subsequent announcement related to the Placing (including Appendix 1), in its entirety and to be making such offer on the terms and subject to the conditions in this Announcement, and to be providing the representations, warranties and acknowledgements contained in Appendix 1.
Expected Timetable
|
|
Expected time and date
|
|
Announcement of Placing Price
|
On or around 25 April 2018 |
|
Expected closing of the Placing
|
1:00 p.m. on 3 May 2018 |
|
Announcement of results of the Placing
|
7:00 a.m. on 4 May 2018 |
|
Admission of the New Shares to the Official List and commencement of dealings on the London Stock Exchange
|
8:00 a.m. on 9 May 2018 |
|
CREST accounts credited in respect of New Shares to be held in uncertificated form
|
8:00 a.m. on 9 May 2018 |
|
Dispatch of definitive share certificates in respect of New Shares (where applicable) |
Approximately 14 days following (where applicable) the admission of the New Shares |
All references to times in this Announcement are to London times unless otherwise stated.
The dates and times specified above are subject to change. In particular, the Directors may (with the prior approval of Stifel) bring forward or postpone the closing time and date for the Placing. In the event that a date or time is changed, the Company will notify persons who have applied for New Shares of changes to the timetable either by electronic mail or by the publication of a notice through a Regulatory Information Service. References to times are to London times unless otherwise stated.
Dividends
For the avoidance of doubt, Qualified Investors who participate in the Placing will not be entitled to the dividend in respect of the quarter to 31 March 2018 which is expected to be declared in April 2018. Qualified Investors who are allotted New Shares will be entitled to the dividend in respect of the quarter ended 30 June 2018 (expected to be declared in July 2018).