Axiom European Financial Debt has announced proposals for a share placing. The company says that shares will be issued at a 1.6% premium to the latest published estimated cum income NAV per share, as at the time the Placing closes, to cover the costs of the Placing, and Winterflood Securities will act as bookrunner in relation to the Placing. The published timetable says that the placing is to close on 12 December, results are to be announced on 13 December and new shares admitted to trading on 15 December. However, the Board says that the current discount on the Shares may impact the timetable. The shares are to be issued under the company’s placing programme, this has a maximum capacity of up to 500 million Shares.
Background to the placing
The Company says that it sees significant investment opportunities in the market over the coming months deriving from improving fundamentals in the financial sector, combined with the acceleration of the Basel 3 transition period. Reflecting this, it says that it is seeking to deploy capital into the subordinated debt market to benefit from the positive credit actions by rating agencies, which should therefore support further spread compression. It will focus more specifically on the estimated €165bn legacy instruments universe, which currently provides, in the Investment Manager’s view, the most attractive risk reward profile in the subordinated debt market. The company says that, as the Basel 3 transition period enters its last phase, corporate actions such as tenders and calls should accelerate, hence supporting valuations. With year-to-date returns in excess of 14%, the Company sees the current period as a very attractive window of opportunity to achieve its 10% long term target returns.
Further changes to increase the company’s appeal to investors
In addition to the Placing, the Board says that it is currently considering a number of changes that it believes could increase the appeal of the Company to investors. These changes include:
- Publishing daily NAVs, instead of weekly NAVs;
- Transferring the Company’s listing from the Specialist Fund Segment of the LSE to the Premium Segment of the LSE;
- Replacing the 7-yearly discontinuation resolution with a commitment to provide full exit opportunities every seven years; and
- Implementing a more specific discount control mechanism.
The board says that, save for publishing daily NAVs, should it determine to implement any of these changes, their implementation would follow the Placing, would be subject to further announcements, and may also be subject to approval by Shareholders.
Axiom European Financial Debt proposes placing : AXI