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‘Unique’ deal hits wholesale debt capital market from Acacia Partners and ASCF
Gilbert + Tobin and Thomson Geer have advised Acacia Partners and ASCF Managed Investments Pty Ltd respectively on a recent DCM issuance with an overall structure that included elements of a securitisation transaction.
Grace Ormsby
Firm: Gilbert + Tobin (Acacia Partners); Thomson Geer (ASCF Managed Investments Pty Ltd); Gilbert + Tobin (EQT Structured Finance Services Pty Ltd)
Value: $35 million
Area: Corporate
Key players: Gilbert + Tobin’s team was led by special counsel and DCM lead Louise McCoach with lawyers Erin Cartledge and Andrew Kourpanidis with graduate Johnathon Geagea.
Thomson Geer was led by partner Matt Reynolds.
Representing the trustee, Gilbert + Tobin’s partner Adela Smith was supported by lawyer Melissa Ramsay.
Deal significance: This deal was “unique” for the Australian wholesale debt capital markets, involving a complex, multiclass note issuance, according to a joint statement from both firms.
The transaction featured issuance by ASCF, which is a related entity of Australian Secure Capital Fund Ltd, of $35 million of five-year senior secured notes to fund a pool of short term, low LVR loans secured by registered mortgages over Australian residential property.
The issuance structure involved $28 million (or 80 percent of total note proceeds) of five-year Class A Senior Secured Notes paying 9.0 per cent per annum, known as senior secured notes.
It also required $4 million (11.4 percent of total note proceeds) of five-year Class B Senior Secured Notes paying 12 per cent per annum, known as mezzanine notes and $3 million (8.6 percent of total note proceeds) of five-year Class C Senior Secured Notes paying zero percent per annum as equity notes.
Mezzanine and equity notes will provide 20 percent subordination (15 percent for the first year) or first loss protection to senior secured noteholders, while the equity notes will provide 8.57 percent (five percent in the first year) subordination or first loss protection to senior secured and mezzanine noteholders.
The joint statement outlined that “the first loss/subordination protection is a key credit enhancement feature of the transaction and significantly reduces the investment risk for the senior secured noteholders and the mezzanine noteholders.”
According to both firms, “the transaction was run efficiently, seamlessly and was well-coordinated between all advisers.”
“The success of this unique transaction means greater opportunity for like-transactions, with BGC Fixed Income Solutions already discussing potential future transactions in this space.”
