FIIG opens bond raise for Cash Converters

FIIG Securities has announced it is arranging a corporate bond market raise for Cash Converters International, aimed at a market of sophisticated or professional investors.

The 5-year unsecured note issue will raise $50-$60 million with a coupon payment of 7.95 per cent and have a minimum initial investment of $50,000.

FIIG said that with bond issues being increasingly seen as a low-risk way to diversify debt, the level of mid-cap interest was “turning from a trickle into a flood.”

“The bond market for mid-cap corporate has gone from something that we all agree should happen sometime to something that is actually happening before our eyes,” FIIG Securities chief executive Mark Paton said.

“This market is serving the dual needs of investors and issuers by offering funding to mid-sized corporates with a tenor that is not readily available in the bank market, while giving investors access to fixed income investments with well-known companies that pay more attractive yields than a bank deposit.”

The Cash Converters announcement follows recent note issues by G8 Education Limited, Mackay sugar Limited and Silver Chef Limited.

Mr Paton said a number of market trends is assisting the interested in the Australian corporate bond market.

“There are a range of trends converging including a recognition that superannuation funds are underweight in bonds, a tight bank funding market for companies and the desire of regulators top make bonds more attractive for issuers and investors,” Mr Paton said.

“These long-term trends will support the growth of this market until corporate bonds have the same place in the Australian investment landscape that they do in other developed countries.”

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