Wednesday 28 November 2018 by Guest Contributor Trade opportunities

FIIG Private Debt business settles $20m deal – Forecast yield 15%pa

FIIG’s Private Debt division has settled a new deal and is actively participating in the growing trend of non-bank lenders arranging private lending opportunities for clients to fill the $20bn plus funding gap left by banks 

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We are delighted to announce the inaugural deal for the FIIG Private Debt (FPD) team, with Erryn Lloyd-Jones commenting that, “we are pleased to have arranged $20m in private debt funding for this well-established player in the growing Australian receivables management industry. It highlights the high quality investment opportunities becoming available due to the dislocation created by banks rationing credit”.  At the borrower’s request and for commercial reasons, the identity of the business has been withheld. 

The FPD team will aim to deliver several new transactions per year, targeting Internal Rates of Return (IRR) to investors in the range of 8% to 20% per annum.

These debt funding deals will be up to $50m in size, are structured as loans and are often complex transactions where the FPD team are focussed on extracting a return premium for the “illiquidity”, currently exhibited in the Australian corporate and property debt markets, due to reducing local bank funding and risk appetite generally. 

Deal Background for FIIG Investors

  • The $20m loan was syndicated to seven investors including one Australian credit fund, one Australian Family Office plus five individual HNW and SMSF investors.
  • The credit profile of this transaction was strong and investors took comfort from a robust senior secured debt package that is well supported by recurring cash flows from many thousands of individual counterparties.
  • The borrower’s industry is somewhat defensive in nature and tends to perform better than other industries during an economic downturn which appealed to those who invested.

Private Debt borrowers are smaller than the businesses which FIIG Debt Capital Markets typically arrange bond financing for, or represent companies at an earlier stage in their corporate lifecycle. The FPD team undertakes comprehensive due diligence on every opportunity, which is bolstered by external experts reports if needed.

Less than 5% of transactions evaluated by the FPD team will typically proceed to the stage where FIIG investors are invited to review the transaction. Moreover and importantly, all transactions require unanimous approval from the FIIG Credit Committee to proceed, which includes our Head of Research, Thomas Jacquot.

FIIG Private Debt Investment Features:

  • Minimum investment is $500,000 and investors must be wholesale.
  • Direct access to private debt loan opportunities.
  • Strong risk adjusted returns, without compromising credit underwriting standards.

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

FIIG Private Debt is responsible for originating, executing, managing and syndicating private debt financing opportunities for mid-market and property companies utilising capital sourced from FIIG’s existing institutional and professional investors. FIIG Private Debt will typically distribute debt investments from $10m - $50m including; senior, junior and mezzanine and debt.