DN1 Placement Nets $45.45 Million at Slight Discount to Market Price
Dominion Income Trust 1 (ASX, DN1) has successfully completed a $45.45 million placement, issuing new units at a slight discount to the last closing price. The capital raised will be invested in floating rate notes aligned with the Fund’s strategy.
- Placement raised $45.45 million from wholesale investors
- New units issued at $101 per unit, a 0.57% discount to last close
- No unitholder approval required under ASX Listing Rule 7.1
- Proceeds to be invested in floating rate notes consistent with Fund strategy
- New units to commence trading on ASX on June 17, 2025
Successful Capital Raise
Dominion Income Trust 1 (DN1) has announced the successful completion of a placement that raised $45.45 million by issuing new fully paid ordinary units to wholesale investors. The placement, which closed on June 4, 2025, was met with strong demand from both existing and new unitholders, exceeding the maximum available capacity. This enthusiastic response underscores investor confidence in the Fund’s strategy and management.
Pricing and Regulatory Compliance
The new units were priced at $101 each, representing a modest 0.57% discount to the closing price of $101.575 on June 3, 2025. Importantly, the placement was conducted within the Fund’s 15% capacity under ASX Listing Rule 7.1, meaning no additional unitholder approval was necessary. This streamlined process allowed for a swift capital raise without diluting existing investors’ control beyond the permitted threshold.
Investment Strategy and Use of Proceeds
The proceeds from the placement will be invested in unsecured, unsubordinated, deferable, redeemable floating rate notes issued by Dominion Income Trust 1. This aligns with the Fund’s disclosed investment strategy, which focuses on credit fixed income assets designed to generate stable income streams. The floating rate notes are expected to provide a degree of protection against rising interest rates, a relevant consideration in the current economic environment.
Next Steps and Market Impact
New units are scheduled to be issued on June 16 and are expected to commence trading on the ASX on June 17, 2025. These units will rank equally with existing units, including entitlement to distributions from the date of issue. Equity Trustees Limited, the responsible entity, anticipates lifting the trading halt on DN1 units shortly, allowing the market to absorb the new supply of units. Investors will be watching closely to see how the placement impacts unit price and distribution yields in the coming months.
Management Commentary
Andrew Papageorgiou, Chief Investment Officer of Realm Investment Management, the Fund’s investment manager, expressed satisfaction with the placement’s outcome. He highlighted the strong support from both existing and new investors and the early closing of the placement due to excess demand. This positive reception may signal confidence in the Fund’s income-generating strategy amid a competitive fixed income market.
Bottom Line?
With fresh capital secured, Dominion Income Trust 1 is poised to reinforce its income strategy, but investors will be keen to monitor how this translates into future distributions and unit price performance.
Questions in the middle?
- How will the increased capital base affect future distribution rates for unitholders?
- What are the risks associated with the floating rate notes in the current interest rate environment?
- Will the strong demand for the placement signal sustained investor appetite for DN1 units?
