We reiterate our Outperform recommendation on Axsesstoday Group’s secured 7.50% notes due 2021 and secured BBSW+6.50% notes due 2022 following the company’s announcement that it has launching a AUD50m unsecured note. Our credit outlook is Positive
Axsesstoday Group (Axsess, Company) has announced its intention to raise a minimum of AUD50m in unsecured notes. The notes will be floating rate and pay an indicative interest rate of 4.90-5.20% over BBSW. The notes will be listed on the ASX under the Simple Corporate Bond regulations and therefore have no call dates. They will have a five year maturity date of 20 July 2023.
The proposed notes are issued at the holding company level, Axsesstoday Ltd, and are unsecured. They rank behind all other debt issued by the group including its senior secured bank facilities, the secured 7.50% June 2021 notes and the BBSW+6.50% Oct 2021 notes.
The notes have less restrictions and weaker covenants when compared to the secured notes.
The issue of the unsecured notes does not affect our recommendations on the secured 7.50% June 2021 or the BBSW+6.50% October 2021 notes.
We believe the proposed notes do not offer attractive relative value, particularly noting the unsecured position in a company carrying significant secured debt, the weaker covenants, and the five year bullet maturity.
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