This offer closed on:
19 February 2020
3 for 4 Entitlement Offer and Shortfall Offer
Equity Trustees Limited as the Responsibly Entity (RE) has announced the launch of NB Global Corporate Income Trust (NBI) (Trust) 3 for 4 Entitlement Offer and Shortfall Offer(1) to raise up to approximately $749 million(2). NBI listed on the ASX on 26 September 2018 and provides investors with an opportunity to receive monthly income by investing in high yield bonds issued by large, liquid companies globally.
For the current financial year beginning on 1 July 2019 and up to 31 December 2019, the Trust has paid monthly distributions to existing Unitholders amounting to 5.39 cents per Unit which keeps it on track to achieving its stated Target Distribution of 5.25% per annum. It is important to note that the Target Distribution is subject to review by 30 June 2020 by the Manager and may change (please refer to Section 3.3.1 of the PDS).
Neuberger Berman (NB) as the Manager hedges all currency exposures back to AUD and employs hedging techniques designed to minimise fluctuations in the value of the Trust's investments by reducing the risk of adverse movements in currency exchange rates and, potentially, interest rates.
- Entitlement Offer – A pro-rata non-renounceable 3 for 4 Entitlement Offer to raise up to approximately $749 million – Record Date 24 January 2020.
- Oversubscription Facility – The Entitlement Offer includes an Oversubscription Facility which will allow eligible unitholders to subscribe for units in excess of their entitlement
- Shortfall Offer – New investors will have the opportunity to apply for units (minimum 2,500 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 2nd March 2020 for the Entitlement Offer and 9th March 2020 for the Shortfall Offer)
- Offer price per New Unit under the Offer is $2.05 (NTA)
- The Offer Price is based on the NTA per unit as at 17 January 2020, net of Distributable Earnings for the month of January 2020 accrued
Who can participate
- Unitholders who are eligible to participate in the Entitlement Offer (“Eligible Unitholders”) can subscribe for 3 new units for every existing 4 units held on the Record Date being 24 January 2020
- Eligible Unitholders can also apply for units in excess of their entitlement under the Oversubscription Facility (details of which are set out in Section 11 of the PDS)
- 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
- The investment strategy for the Trust is to invest in and actively manage a portfolio of high yield bonds issued by companies located globally across both developed (e.g. the U.S. and the U.K.) and emerging (e.g. Brazil and China) markets, with a strong emphasis on capital preservation by focusing on higher quality bonds within the Global High Yield Market, large and more liquid companies and by avoiding companies with deteriorating financials.
Advantages of the Raising
- Greater scale and portfolio diversification.
- Additional capacity to invest in opportunities which meet NBI’s disclosed investment objectives.
- Supportive of ongoing market liquidity of NBI.
Key features of the offer
- Offer Price of $2.05 per Unit, based on the NTA per Unit as at 17 January 2020, net of accrued Distributable Earnings for the month of January 2020
- Minimum of 2,500 units must be applied for under the Shortfall Offer
- Monthly Target Distributions of 5.25% p.a.(3) (net of fees and expenses)
- Exposure to the high yield bonds of global companies
- Access to the expertise of specialist portfolio managers located around the world
- Portfolio diversification, offering exposure to a portfolio of the bonds of 250-350 large, liquid global companies and complimentary to other fixed interest investments
- Emphasis on capital preservation by focusing on higher quality rated high yield corporate bonds(4)
- ASX listed liquidity
Issuer: Neuberger Berman (NB)
Transaction: Entitlement Offer and Shortfall Offer
Morgans Role: Joint Arranger and Joint Lead Manager
Offer Size: $749 million
Offer Open: 29th January 2020
Morgans Closing Date: 19th February 2020
- Morgans will receive fees for its role.
- The Offer size may be less than $749 million.
- The target distribution rate is set at 5.25%. The Target Distribution is only an annualised target and may not be achieved. The Target Distribution will be formally reviewed at least annually (as at the end of each financial year) and any change in the Target Distribution will be notified by way of ASX announcement as required.
- The NAV will reflect the value of the bond portfolio and move accordingly.
Investors should review the PDS to understand the features and risks of the NB Global Corporate Income Trust. Application for NB Global Corporate 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.
NB Global Corporate 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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