YieldReport has previously commented about how bonds issues from unrated corporates are not particularly common. The last unrated bond issue was a $50 million raising by Impact Homes and that occurred two months ago. Given the number of bond issues going on in Australia and around the globe, two months seems a long time between drinks.
IMF Bentham has no credit rating but it plans to break the drought with a June 2020, 7.40% secured corporate note issue. The litigation funder is seeking to raise $30 million with room for an additional $20 million should investor demand be present. According to the company, the incentive to issue corporate notes relates to the diversification of its funding sources while simultaneously lengthening its debt maturity profile.
The notes to be issued will have some slightly unusual features. They are callable in June 2019 at $101.00 and feature a 100bps step-up interest penalty for the period of time should shareholders equity fall below $100 million. There’s also an investor put option should a change of control event occur or if IMF’s existing ASX-listed bonds (ASX code: IMFHA) are suspended. The bonds themselves will not be listed.
FIIG Securities is the lead manager.