Retail investors can now invest in high yield Moneytech Finance bonds with an indicative yield to the par call date of 6.85% and a yield to maturity of 7.39% per annum in minimum parcels of $10k
Moneytech Finance is an Australian asset backed finance subsidiary of US Listed Source Financial. Founded in 2003, Moneytech provides receivables purchase facilities and trade finance to small and medium enterprises in Australia, facilitated by their proprietary core payment platform, the Moneytech Exchange.
Moneytech currently has over 2,500 active accounts and originated over $260m in receivables and loan assets during the 2015 calendar year. The assets Moneytech originates are characterised by being:
- High quality with insurance cover for losses over annual thresholds and credit policy surveillance from both the insurer and the senior financier
- High margin, the issuer targets a 50% gross margin subject to credit quality of the underlying exposure
- High 'velocity' or turnover, with the average dollar of principal lent being repaid in 52 days
The Issuer is required to hold cash reserves against debt borrowed to fund these assets. The size of these cash reserves increases or decreases in line with portfolio performance.
The Notes offer a floating return (paid quarterly) of 90 day BBSW+4.65% p.a., with a par call date in April 2020, and a final maturity in April 2022. The company has flagged its intention to call the notes on the par call date at 100%, however it has the option to call the Notes at 104% in April 2018, 102% in April 2019 and 100% from April 2020 or any subsequent interest payment date.
If the issuer fails to call the notes on the par call date, the notes will step up to pay a floating interest rate of 90 day BBSW+6.25% from April 2020 to April 2021 and 90 day BBSW+6.75% from April 2021 until final maturity date in April 2022.
The bonds are currently offered at an indicative yield to par call of 6.85% and a yield to the final maturity of 7.39%. The minimum parcel size is $10,000.
The Moneytech Finance research report can be found by clicking here.
Pricing is accurate as at 12 April 2016 but subject to change. Please contact your local dealer for more information.