MA Income Credit Trust Raises Nearly A$50m to Expand Private Credit Reach
MA Income Credit Trust (ASX, MA1) has launched a placement to raise nearly A$50 million, aiming to bolster its exposure to private credit through new unit issuance at a slight discount. The capital will fund investments across direct lending, asset-backed lending, and corporate lending segments.
- Placement to raise approximately A$49.7 million via 24.9 million new units at A$2.00 each
- Funds directed to MA Credit Income (Wholesale) Fund focusing on private credit investments
- Targeting consistent monthly distributions with a pre-tax return objective of cash plus 4.25% per annum
- Strong performance since IPO with an 8.86% annualised net return as of May 2025
- Comprehensive risk disclosures and capital management strategies including off-market buybacks
Capital Raise to Fuel Private Credit Growth
MA Income Credit Trust (ASX – MA1) has announced a placement to raise approximately A$49.7 million through the issuance of about 24.9 million new units priced at A$2.00 each. This price represents a modest discount of around 1% to the recent trading price and net tangible asset value, signaling a balanced approach to capital raising that respects existing unit holders while attracting new investors.
The proceeds from this placement will be invested in the MA Credit Income (Wholesale) Fund, a specialist private credit vehicle managed by MA Investment Management Pty Ltd. This fund focuses on three core lending segments – direct lending, asset-backed lending, and direct corporate lending. These areas represent a diversified approach to private credit, targeting opportunities that are typically less accessible to retail investors.
Performance and Distribution Objectives
Since its IPO in March 2025, MA Income Credit Trust has delivered a strong performance, with a trailing annualised net return of 8.86% as of May 2025. The trust aims to provide investors with consistent monthly distributions, targeting a pre-tax return of cash plus 4.25% per annum. This objective reflects the trust’s focus on generating stable income streams, which is particularly attractive in the current low-interest-rate environment.
The new units issued under the placement will be eligible for the July 2025 distribution, subject to the discretion of the Responsible Entity. This ensures that new investors can participate in the income generated by the trust without delay.
Portfolio Composition and Recent Activity
The trust’s portfolio is highly diversified, comprising 178 underlying credit investments with a median position size of approximately 0.3% of total portfolio asset exposure. The portfolio spans a wide range of asset types and markets, including residential mortgages, supply chain finance, fleet and auto finance, specialty finance, and corporate loans. Recent investment activity includes funding approximately $820 million in loans during the three months to March 2025, reflecting ongoing momentum across all lending strategies.
Risk Management and Capital Strategies
MA Income Credit Trust provides detailed disclosures on the risks inherent in private credit investments, including credit default risk, liquidity risk, interest rate risk, and operational risks. The trust employs rigorous portfolio management and monitoring practices to mitigate these risks. Additionally, the Responsible Entity intends to support liquidity through quarterly off-market buybacks of up to 5% of issued capital, offering investors an alternative channel to exit their holdings.
The trust’s alignment with MA Financial Group is underscored by significant co-investment, with over $220 million invested by MA Financial and its staff across related funds. This alignment aims to ensure that the interests of the manager and investors are closely connected.
Looking Ahead
With this capital raise, MA Income Credit Trust is positioned to expand its footprint in the private credit market, leveraging its established track record and diversified portfolio. Investors will be watching closely to see how the trust deploys the new capital and maintains its performance amid evolving market conditions.
Bottom Line?
MA Income Credit Trust’s latest placement underscores its commitment to growing a diversified private credit portfolio while maintaining strong income generation and risk management.
Questions in the middle?
- How will the trust allocate the new capital across its lending segments in the coming quarters?
- What impact might changing interest rates and credit conditions have on the trust’s future returns?
- Will the off-market buyback program effectively support liquidity for investors in a fluctuating market?