IMF Bentham’s most recent update shows the company in a strong liquidity position
IMF Bentham (‘IMF’) provided its quarterly update to the market (link to announcement here)
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The quarterly result highlighted strong net operating cash inflows of $46.4m. Since 30 June, IMF has received a further $30.4m cash distribution from the Lehman Brothers matter plus $5.8m in proceeds from the sale of its interest in the European joint venture.
Following the strong quarterly result and further cash inflows in July, IMF’s current cash position is around $180m versus $82m of bonds outstanding. This places IMF in a ‘net cash’ position with surplus cash over debt outstanding of $100m.
The strong liquidity position means IMF is well placed to invest in new (as well as existing) cases without having to raise further debt. IMF maintains a high liquidity buffer to satisfy litigants and courts that it has sufficient resources to meet funding of costs during trials and any adverse judgements.
IMF also provided its quarterly case investment portfolio update (available here). The estimated value of IMF’s overall case investment portfolio remained at $3.4bn with a total of 54 matters. This is despite completing three large matters worth $224m in the quarter. The investment portfolio includes seven new funded cases with a portfolio value of $169m as IMF continued to implement its growth and portfolio diversification strategy. Based on past performance, IMF expects to generate revenue of around 15% of the estimated claim value at the time a matter is completed, which broadly equates to a potential $510m in revenues.
The IMF 7.40% senior secured bond maturing in June 2020 is currently indicatively offered at a yield to worst* of 6.40%.
Please contact your FIIG representative for further information on the IMF Bentham bond. Available to wholesale investors at a minimum face value of AUD10,000.
*The yield to worst represents the yield to maturity in this instance. We note the bonds are callable in June 2019 at $101.