Metrics Credit Partners

MCP Master Income Trust

1 for 2 Entitlement Offer and Shortfall Offer

The Trust Company (RE Services) Limited as the Responsible Entity (RE) has announced the launch of MCP Master Income Trust (MXT) (Trust) 1 for 2 Entitlement Offer and Shortfall Offer(1) to raise up to $638 million(2) at $2.00 per unit. Metrics Credit Partners (MCP) is the Manager of the Trust.

MXT listed on the ASX in October 2017 at $2.00 per unit and has consistently delivered cash income of 5.55% per annum over the past twelve months including December 2019 and 5.45% per annum since listing(3). The Offer will increase liquidity, further diversify the corporate loan portfolio and deliver lower overall costs to Unitholders.

MXT provides investors with direct exposure to the Australian corporate loan market by co-investing with institutional investors in a professionally managed and diversified loan portfolio. It pays monthly income and targets a net cash return of RBA cash rate + 3.25% (currently 4.00% p.a.). This target rate will adjust in line with changes in interest rates.

Offer Structure

  1. Entitlement Offer – A pro rata non-renounceable 1 for 2 Entitlement Offer - Record Date 7.00pm, 12 February 2020
  2. Oversubscription Facility – The Entitlement Offer includes an Oversubscription Facility which will allow Eligible Unitholders to subscribe for Units in excess of their entitlement
  3. Shortfall Offer – New investors will have the opportunity to apply for units (minimum $1,000 worth of Units) in the Trust which have not been taken up under the Entitlement Offer

The New Units to be issued under the Offer will rank equally with existing Units on issue at the time of allotment including full entitlement to any distributions declared on or after the allotment date (being 13 March 2020 for the Entitlement Offer and 18 March 2020 for the Shortfall Offer).

Offer Price

  • Offer price per New Unit under the Offer is $2.00 (NTA) for both the Entitlement Offer and Shortfall Offer

Who can participate

Eligible Unitholders

  • Unitholders who are eligible to participate in the Entitlement Offer (“Eligible Unitholders”) can subscribe for 1 New Unit for every existing 2 Units held on the Record Date being 12 February 2020
  • Eligible Unitholders can apply for units in excess of their entitlement under the Oversubscription Facility (details of which are set out in Section 2 of the PDS)

New Investors

  • Investors who are not eligible to participate in the Entitlement Offer and meet conditions outlined in the PDS can apply for Units under the Shortfall Offer
  • You should note that there is no guarantee that Units will be allocated under this Offer

Use of Funds

  • MCP continues to see a strong pipeline of lending opportunities across a variety of borrowers and industries
  • Proceeds from the Offer will provide MXT with additional capital for new lending opportunities in MCP’s wholesale funds consistent with the Trust’s Investment Strategy

Advantages of the Raising

  • Additional scale to expand the Trust’s participation in Australia’s corporate lending market
  • Develop greater portfolio diversification
  • Lower total costs to Unitholders whilst maintaining target return
  • Supportive of ongoing market liquidity of MXT

Key features of the Offer

  • Offer price of $2.00 per Unit
  • Minimum of $1,000 worth of Units must be applied for under the Shortfall Offer
  • Monthly Target Distribution of the RBA Cash Rate + 3.25% i.e. approximately 4.00% p.a.(4) (net of fees)
  • Monthly income distributions that will move with changes in interest rates
  • Income supported by a professionally managed diversified portfolio of corporate loans
  • The Trust is diversified with over 140 loans to borrowers across industries and the credit spectrum and Offer proceeds will be used to further enhance diversification
  • Expected low capital volatility(5)
  • ASX listed liquidity

Issuer: Metrics Credit Partners (MCP)

Transaction: Entitlement Offer and Shortfall Offer

Morgans Role: Joint Lead Manager

Offer Size: $638 million

Offer Open: 13th February 2020

Morgans Closing Date: 4th March 2020

  1. Morgans will receive fees for its role.
  2. The Offer size may be less than $638 million.
  3. Past performance is not a reliable indicator of future performance.
  4. The target distribution rate is set at the RBA Cash Rate (currently 0.75%) + 3.25% and will move in line with interest rate levels. The Target Return is only a target and may not be achieved. The Trust may not be successful in reaching its objective.
  5. The NTA will reflect the value of the loan portfolio assets and move accordingly.

More information

Investors should review the PDS to understand the features and risks of the MCP Master Income Trust. Application for MCP Master Income Trust can only be made by completing the application form attached to the PDS.

If you have any questions about the offer, please contact your Morgans adviser, call 134 226 or find your nearest office here.

Download Prospectus

MCP Master Income Trust Units are being offered only in Australia and New Zealand and the PDS will only constitute an offer to a person receiving it in Australia and New Zealand. Not for distribution, directly or indirectly, in the United States or to, or for the account or benefit of, US Persons, except in accordance with an available exemption from the registration requirements of the US Securities Act. The distribution of the PDS (including an electronic copy) in jurisdictions outside Australia may be restricted by law.

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