Fresh debt deal design draws interest

The transaction was unique for the Australian debt capital markets, top firms say

Fresh debt deal design draws interest

A debt capital markets deal structured by Gilbert + Tobin (G+T) and Thomson Geer is attracting interest after a successful issuance by a fund manager.

G+T advised Acacia Partners, the arranger of the $35m issuance of five-year secured notes by ASCF Managed Investments (ASCF), a related entity to Australian Secure Capital Fund. G+T also acted for EQT Structured Finance Services, the trustee of the transaction.

Thomson Geer advised ASCF. The deal’s lead placement manager was BGC Fixed Income Solutions, a division of BGC Securities (Australia).

“This deal was unique for the Australian wholesale debt capital markets and involved a complex, multi-class note issuance, with the overall structure including elements of a securitisation transaction,” the two firms said in a joint statement.

There were three tranches to the transaction, consisting of five-year Class A, Class B, and Class C senior secured notes with yearly yields of 9%, 12%, and 0%, respectively. The Class A senior secured notes made up $28m of the issuance, while the Class B mezzanine notes and Class C equity notes accounted for $4m and $3m, respectively.

The firms said that the mezzanine notes and equity notes will provide 20% (15% in the first year) subordination or first loss protection to the senior secured noteholders. The equity notes will provide 8.57% (5% in the first year) subordination or first loss protection to the senior secured noteholders and the mezzanine noteholders.

“The first loss/subordination protection is a key credit enhancement feature of the transaction and significantly reduces the investment risk for the senior secured noteholders and the mezzanine noteholders,” G+T and Thomson Geer said. “The success of this unique transaction means greater opportunity for like-transactions, with BGC Fixed Income Solutions already discussing potential future transactions in this space.”

On the arranger side, the G+T team was led by Louise McCoach, special counsel and debt capital markets lead. She was supported by lawyers Erin Cartledge and Andrew Kourpanidis

and graduate Johnathon Geagea. On the trustee side, the G+T team was led by partner Adela Smith, who was supported by lawyer Melissa Ramsay.

The Thomson Geer team that advised ASCF was led by partner Matt Reynolds.


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