SCT Logistics eyes bonds for financial leverage


Intermodal company seeks up to $85 million to pay debt and fund investment

SCT Logistics eyes bonds for financial leverage
SCT is looking for a flexible funding arrangement and a balanced debt profile.

 

SCT Logistics is undertaking what is claimed to be Australia’s largest unrated bond issue for a private business.

The national multi-modal transport and logistics company is looking to raise $75-85 million through two types of bonds: Series A – minimum of $30 million of four year floating-rate notes, and Series B – minimum of $45 million of six-year fixed-rate notes.

SCT founder and chairman Peter Smith said the funds would be used to pay down the company’s existing debt and diversify its funding sources. 

"This bond issue will deliver us a more flexible funding arrangement and a balanced debt profile," Smith states.

"It gives us greater certainty to plan our operations and invest over the medium to long term.

"As a private company, the ability to access a new investor base via the debt capital markets is a real competitive advantage, reinforcing the scale and pedigree of the SCT business."

The offering is to be arranged by FIIG Securities.

The bonds will have a minimum initial investment of $50,000 at issue and will be distributed to new and existing FIIG Securities clients who qualify as sophisticated or professional investors.

FIIG CEO Mark Paton says this and similar initiatives recently were evidence of the growing awareness among Australian corporates of the bond issue option.

"SCT Logistics is another example of a quality Australian company with a well-established business that is seeking funding from bond investors for the first time," Paton says.

"This is a very positive development because it recognises that private companies such as SCT Logistics can access the Australian bond market, reinforcing the maturity of the market and servicing the diversification needs of both investors and issuers."

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