Last month FIIG was the sole lead arranger for the SPC Global issue of A$20m, four-year, 9.00% unsecured fixed rate notes.
FIIG is the market leader in providing unrated corporates access to the bond market and investors with unique opportunities to invest in Australian mid-market businesses.
SPC Global
SPC Global (“SPCG”) is a leading diversified Australian food and beverage manufacturer comprising four main businesses and several key brands, including the iconic SPC which was established in 1918.
- SPC - SPC is a household name and Australia’s largest producer of fruit, tomato, baked beans and spaghetti products, specialising in processing, packaging, and canning.
- The Original Juice Company - An Australian beverage and wellness company focussed on developing innovative, health-focussed products for retail distribution in Australia and internationally.
- Nature One Dairy - An Australian-founded dairy company that manufactures and sells premium infant formula, nutritional formula and milk powder products, with an established sales and marketing presence in Australia, China and other Asia-Pacific markets.
- Natural Ingredients - A supplier of fruit and vegetables to the food manufacturing, food service, and retail industries.
SPCG was formed through a reverse take-over of ASX listed The Original Juice Company by SPC, alongside the concurrent acquisition of Nature One Dairy. The merger of three entities was completed in December 2024, and SPCG is now listed on the ASX (SPG), with a current market capitalisation of approximately $75million.
Post merger SPCG had announced several initiatives to consolidate its operations and achieve operating growth synergies and was seeking a capital provider to build a meaningful partnership with over the coming years.
About the Transaction
- Issue size $20 million
- Unsecured medium term fixed rate notes
- Four year tenor
- 9.00% fixed paid semi-annually in arrear
SPCG engaged with FIIG to help provide a unique solution to complement its existing senior lender facilities. FIIG Debt Capital Market (“DCM”) team conducted detailed due diligence on the group, including detailed review of all parts of the business, a site visit of the SPC 240,000 sqm manufacturing facility in Shepparton, Victoria and multiple meetings with key management and stakeholders. Through this FIIG was able to gain a deeper understanding of the business to deliver a structured debt solution that mitigated investor risks. FIIG was attracted by the opportunity to bring this household name to its investors given the group’s market leading presence and the defensive, consumer staple nature of its products.
The SPCG issue was an opportunity to deliver to investors a strong performing Australian corporate name against a market backdrop that has been dominated by issuances in the financial sector over recent years.
Since May 2022, the total volume of Tier 2 hybrid issuance (which mainly consists of the big 4 banks and Macquarie) has been approximately 65% of the volume of total issuance in the corporate bond market (excluding financials) over the same period.
The FIIG team, led by Daniel Jones, were exceptional in understanding our corporate strategy and financing needs. The corporate bond diversified our debt base and provided us with flexibility to meet our strategic objectives. The transaction itself was seamless, efficient and we were kept informed every step of the way. This created a true partnership, especially as FIIG took the time to understand our corporate growth strategy and objectives – not something you always find when it comes to debt financing. The placement of a corporate bond was a first for the newly formed SPC Global and will now become a staple part of our funding options now and into the future. - Robert Iervasi - Managing Director, SPC Global
About FIIG Debt Capital Markets
Since its first transaction in 2012, the FIIG Debt Capital Markets team has been the sole arranger on 80 transactions raising more than $3.0 billion for rated and unrated Australian and New Zealand corporates. Our sector strategy can be split across our four main segments being Diversified Corporates, Property, Financials, and Infrastructure.
Within these segments, DCM seeks to raise capital to either complement existing more traditional senior bank finance or to replace the senior lender entirely. Companies looking for this capital are often in a high growth transitional phase of their strategy whether this be organic growth and capital expenditure or acquisition.
The high yield unrated bond markets seeks to fill a funding gap between the bank market and the private credit market, that sometimes assumes some level of equity risk to achieve returns. High yield doesn’t necessarily mean high risk. FIIG require minimum standards around corporate governance, earnings, operating track record and management.
The FIIG DCM team covers the market utilising its network to find the right opportunity and fit for a bond issuance. Companies go through stringent and comprehensive credit assessment and due diligence. Less than 10% of the opportunities FIIG reviews result in a transaction.
High yield unrated corporate bonds are a good diversification to an investor’s portfolio providing strong risk adjusted returns. Since inception, the 80 FIIG arranged bonds have returned to an average IRR of ~7.2% (or 5.3% above the RBA cash rate over the same period) to our investors (including all losses and mark to market pricing on current bonds).