Entitlement Offer: Gryphon Capital Income Trust

The Gryphon Capital Income Trust (GCIT) is a listed income trust (LIT) designed to provide investors with exposure to the Australian Securitisation market (ASX Code: GCI). This asset-class is a pillar of the Austarlian fixed income market and primarily consists of Residential Mortgage-Backed Securities (RMBS), representing the majority of the GCIT portfolio.

The GCIT raised $175.3 million at its initial IPO in May 2018, an additional $11.8 million in May 2019 and is seeking to raise up to an additional $108.0 million through a 1 for 2 Entitlement Offer in conjunction with an Entitlement Placement / Shortfall Offer.

The domestic RMBS and broader securitisation market has historically been restricted to institutional investors but GCIT presents investors with a key opportunity to diversify further across the fixed income spectrum. Unlike traditional fixed income instruments such as bonds, securitised assets offer bespoke investments with a number of structured mitigants. Principally for this reason, GCIT offers a unique investment opportunity and exposure to a credit market typically not generally accessible by retail investors.

Due to the specialist nature of investing in RMBS, proven expertise is a requisite and Gryphon Capital Investments (the manager) will continue to leverage its existing successful strategies for the GCIT. The investment objective of the trust is to provide stable income, with a target return of 3.50% p.a. above the RBA Cash Rate (after fees), payable monthly.

The Offers are expected to be fully listed by 14 August 2019 at an indicative Net Asset Value (NAV) of $2.00.

Please note that the Product Disclosure Statement (PDS) was lodged with ASIC on 25 June 2019.  BondAdviser reserves the right to vary or withdraw our research opinion should material changes arise during the lodgement period.

Summary details of the transaction are listed in the table below:
 

Product Type

Listed Investment Trust

Asset Class

Fixed Income

Issue Size*

~$295,000,000

Sub-Asset Class

Credit

Net Asset Value**

$2.00

Manager

Gryphon Capital Investments Pty

Fixed / Floating

Floating

Responsible Entity

One Managed Investment Funds

Payment Frequency

Monthly

Custodian & Administrator

One Managed Investment Funds

Target Distribution***

RBA cash rate plus 3.50% p.a.

Unit Registrar

Mainstream Fund Services Pty

First Distribution***

RBA cash rate plus 3.50% p.a.

Offer Opens

4 July 2019

Franking Credits Inclusive

No

Offer Closes****

31 July 2019

ASX Listed

Yes (ASX Code: GCI)

Allotment Date****

13 August 2019

Convertible

No

Commences Trading On****

14 August 2019

GICS Sector

Investment Companies

First Payment Date

September 2019

* Issue size includes inital $175.3 million at IPO in May 2018, $11.8m through a Private Placement in May 2019 and assumes full take up of Entitlement and Shortfall Offers.

** Pro-Forma Net Asset Value (NAV) per unit, subject to change.

*** Distributions are targeted at RBA cash rate plus 3.50% (after fees).

**** Dates are slightly variable between Entitlement and Shortfall Offers.

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