Investment manager Neuberger Berman hopes to capitalise on strong demand for listed credit income funds, launching an offer of new units in its NB Global Corporate Income Trust.
The offer, an entitlement offer and a shortfall offer, is targeting a maximum capital raising of $749 million. Neuberger Berman has committed to pay all costs of the offer, which opens on 29 January.
The entitlement offer is for three new units for every existing four units, with an offer price of $2.05 per unit (based on the NTA per unit on 17 January 2020).
The joint lead managers of the offer are Bell Potter, E&P, Morgans, NAB and Ord Minnett. The co-manager is Cannaccord Genuity.
The NB Global Corporate Income Fund invests in global high-yield corporate debt securities. The manager is targeting monthly distributions equivalent to at least 5.25 per cent a year, with modest growth in assets over time.
It was listed on the ASX in September 2018, with a capital raising of $413 million. The annualised distribution rate for the financial year ended 30 June 2019 was 6.24 per cent, net of fees and expenses.
For the six months to the end December, the fund paid an annualised rate of 5.25 per cent, net of fees and expenses.
Neuberger Berman has been an investor in the high-yield credit market since 1997. According to the product disclosure statement accompanying the offer, it has had “only one defaulting bond in all of its high-yield strategies since 1997.”
The PDS says: “In undertaking its credit analysis, the investment team utilises its credit best practice checklist to try and ensure that the analysts consistently cover the same important aspects of credit research, such as a company’s business operations and strategy, its financials and management.”
Demand for credit funds has been strong over the past couple of years, as investors have chased higher yields. One of last year’s big ASX listings was the KKR Credit Income Fund, which raised $925 million.
Metrics Credit Partners followed up the listing of the Master Income Trust in 2017, with the listing of the $300 million MCP Income Opportunities Trust in March last year and then a $400 million capital raising for the Master Income Trust.
Perpetual listed the Perpetual Credit Income Trust in March last year and late in 2018 Qualitas Group listed the Qualitas Real Estate Income Fund.