Ahmed Fahour’s Latitude Financial (ASX:LFS) is raising funds to fuel growth opportunities by raising about $125million through issuing perpetual, subordinated, unsecured capital notes.
The non-bank lender anticipates paying quarterly, floating rate discretionary distributions, which are cumulative. Latitude expects distributions to be franked at the same rate as dividends on LFS’s ordinary shares.
The margin will be set through a bookbuild and is expected to be in the range of 4.75 percent to 5 per cent per annum. The bookbuild is expected to be completed on 9th September 2021.
The hybrid securities offer comprises an institutional offer and a broker firm offer. The Latitude Financial capital notes are not being offered to the general public.
The capital notes will have priority over Latitude ordinary shares but are subordinated to the claims of senior creditors in a winding-up of the company. There is no fixed maturity date.
The Capital Notes will be listed on the ASX under the expected code of LFSPA. The indicative issue date is 28 September 2021 with ASX trading expected to commence on 29 September 2021.
Latitude Financial said in its announcement that apart from optimising its funding and capital, the funds may include positioning it for future acquisitions and product opportunities in Asia.
Also read: Capital Notes – What Are They and Should You Invest?
The company’s base business is in lending and instalments, holding 2.8 million customer accounts as at 30 June 2021 and 5,500 merchant partners in Australia and New Zealand. Some of its merchants include Apple, Harvey Norman, The Good Guys, JB Hi-Fi, Samsung and Luxury Escapes. Its lending products are also distributed through a substantial broker network. Latitude listed on the ASX in April of this year.
Fahour is Latitude’s chief executive officer and former Australia Post boss and National Australia Bank executive.
Last month, Latitude paid $200 million for personal lending fintech Symple based in Melbourne. Fahour has said that he expects a wave of “revenge spending” in Sydney prior to Christmas with lockdowns hopefully being lifted.
Insight Capital Advisors is the arranger of the Latitude Financial Capital Notes, with Morgans, NAB, Ord Minnett and Westpac being joint lead managers.
