The Perpetual Credit Income Trust (PCIT) (the Trust) is a listed income trust (LIT) designed to provide investors with access and exposure to credit markets with a tilt towards both the private debt markets and high-yield bond markets. This is overseen via an active management mandate overlay, that prioritises capital retention, from an established fixed income team (the Manager) (the Team) that manages over $7 billion. PCIT offers a unique investment opportunity to a typically inaccessible market in Australia for retail investors; over-the-counter bonds require wholesale accreditation and corporate loans typically require a minimum investment of $5 million. Specialist experience and knowledge are paramount to successful operations in a niche market ($8bn in high yield issuance in Australia in 2018) and Perpetual’s team comprises skilled and experienced professionals with a proven track record. The Team is supported by Perpetual Investment’s broader network of investment professionals that together manage $27.7 billion of assets as at December 2018.
The target return of the Trust is floating based on the Reserve Bank of Australia (RBA) Cash Rate plus [3.25]% p.a. net of fees (pro-forma net target return [4.75]% p.a.). The Trust is designed to deliver monthly cash distributions combined with low volatility and avoiding capital downside (first distribution expected following the period ending 30 June 2019). All foreign currency risk is typically hedged into AUD. Outright borrowing is not anticipated and not allowed for gearing purposes; however, everage is permitted as resultant from derivative positions, which is used to take advantage of market opportunities or hedge currency risk, interest rate risk and credit risk. The maximum leverage limit on uncovered derivative positions is [15]% of the Trust’s net asset value (NAV).
Summary details of the transaction are listed in the table below:
|
Product Type |
Listed Investment Trust |
Sub-Asset Class |
Credit |
|
Issue Size* |
[$150,000,000 - $400,000,000] |
Manager |
Perpetual Investment Management Ltd |
|
Net Asset Value** |
$1.10 |
Administrator |
RBC Investor Services Trust |
|
Target Returns |
Floating |
Responsible Entity |
Perpetual Trust Services Limited |
|
Payment Frequency |
Monthly |
Custodian |
RBC Investor Services Trust |
|
Target Distribution |
RBA Cash Rate plus 3.25% |
Unit Registrar |
Automic Pty Ltd |
|
Franking Credits Inclusive |
No |
Offer Opens |
25 March 2019 |
|
ASX Listed |
Yes (Prospective ASX Code: PCI) |
Offer Closes |
18 April 2019 |
|
Convertible |
No |
Allotment Date |
8 May 2019 |
|
GICS Sector |
Investment Companies |
Commences trading on ASX |
14 May 2019 |
|
Asset Class |
Fixed Income |
First Payment Date |
30 June 2019 |
*Issue size subject to change. **We classify the Trust within the GICS Sector "Investment Companies", but note that the ASX is likely to assign it a "Not Applicable" classification.
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Please click here for details of how to apply directly.
Please also see the attached announcement, PDS lodged with ASIC and our Research Report.
