Wednesday 03 April 2019 by Guest Contributor At FIIG

New FIIG originated bond – Armour Energy Ltd

We are delighted to announce the latest new FIIG originated high yield bond from Armour Energy Ltd, the latest in a number of quality corporates accessing non-bank finance through FIIG. The issue sought to raise $55m of secured, amortising notes, paying a fixed rate coupon of 8.75% p.a. payable quarterly in arrears. The Notes are set to mature in March 2024 and are available to wholesale investors only.

NG-5

Armour Energy Ltd (“Armour”) is a Brisbane-headquartered, listed (ASX: AJQ), Oil & Gas Production & Exploration company focussed on the discovery, development and production of gas and associated liquid resources. Armour’s key asset is located in Queensland, with exploration tenements in the Northern Territory, Victoria and Uganda.

  • Armour has transitioned from its previous exploration focus and its core activity is the operation of its Kincora project, which has been in existence since 1977, and which the Company acquired from Origin Energy in 2016. Kincora consists of 4,200 square kilometres of highly prospective, exploration acreage, infrastructure including a producing processing plant with long-dated history prior to AJQ’s ownership, and a storage facility at Newstead with capacity of over 7.5PJ.
  • Supporting this project is a contract with APLNG which has committed to buy 10TJ per day over the term of the Notes.
  • Armour re-started production at Kincora in 2018 and is currently producing about 12TJ/day, targeting daily production of 20TJ by EO CY19 with plant having proven capacity of up to 30TJ/day. 10TJ of the current 12 TJ/day output is contracted offtake with Australia’s largest purchaser and producer of LNG – APLNG.
  • The acquisition of the Kincora Asset is a critical pillar of the Company’s 4 stage growth strategy to diversify Armour from an exploration company into a diverse producer of energy for both the domestic and potentially international markets.
  • Armour sought to raise AUD55m of senior secured amortising notes maturing in March 2024 in order to refinance the Company’s existing convertible notes, as well as fund growth capital expenditure. The Notes have the benefit of security over substantially all of the Company’s assets, as well as a comprehensive maintenance covenant package which Armour is required to comply with on a quarterly basis.
  • Armour’s board of directors and senior management team have significant experience in the oil & gas sector. In particular, several board members and Executive Management have been involved with Arrow Energy, acquired by Shell and Petrochina in 2010 for AUD5bn (nine years after listing on the ASX for AUD20m).

The Armour Notes are available in $10,000 parcels through FIIG’s DirectBond service. They are currently trading at a yield to worst of 8.00%pa.

Interested to learn more either as a borrower or investor? Please see the FIIG website or call 1800 01 01 81.

The FIIG Debt Capital Markets (DCM) team arranges long term, flexible AUD bond financing for rated and unrated Australian and New Zealand corporates. The DCM team provides debt advisory services focused on optimising capital structures and diversifying sources of debt funding. DCM has significant fund raising capabilities, arranging over $2.1bn in funding since 2012 and will typically distribute note issuances from $30-100m including: senior, junior and mezzanine debt.

 

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