MA Credit Income Trust Launches $190.5M Entitlement Offer to Expand Private Credit Portfolio
MA Credit Income Trust (ASX, MA1) has announced a $190.5 million non-renounceable entitlement offer at a 3.4% discount, aiming to bolster its private credit investments across asset-backed, direct asset, and corporate lending sectors.
- Non-renounceable entitlement offer to raise approximately $190.5 million
- New units priced at $2.00 each, a 3.4% discount to last traded price
- Proceeds targeted at expanding private credit portfolio across three lending verticals
- Offer open to eligible Australian and New Zealand unitholders with oversubscription and shortfall facilities
- First quarterly buy-back deferred due to current market conditions
Entitlement Offer Details
MA Credit Income Trust (ASX, MA1) has unveiled a significant capital raising initiative through a non-renounceable entitlement offer and shortfall offer, targeting approximately $190.5 million. Eligible unitholders in Australia and New Zealand are invited to subscribe for one new unit for every two units held, at an issue price of $2.00 per unit. This price represents a modest 3.4% discount to the trust's last traded price, reflecting a strategic balance between attracting investment and maintaining value for existing holders.
Strategic Deployment of Capital
The funds raised will be deployed in line with MA1's established investment strategy, focusing on private credit opportunities. The trust's portfolio, which now exceeds $5 billion across more than 180 positions, spans asset-backed lending, direct asset lending, and corporate lending. Frank Danieli, Head of Global Credit Solutions at MA Financial Group, emphasized the trust's disciplined approach to credit, highlighting the alignment of interests through substantial investments by MA Financial and its staff themselves.
Offer Mechanics and Market Context
The offer includes an oversubscription facility allowing eligible investors to apply for additional units beyond their entitlement, as well as a shortfall offer to wholesale investors for any unsubscribed units. Notably, the offer is not underwritten, introducing an element of uncertainty regarding full subscription. The new units will rank equally with existing units, including entitlement to future distributions, and are expected to be issued on 1 October 2025 with trading commencing the following day.
Regulatory Relief and Buy-Back Decision
MA1 has secured relief from the Australian Securities and Investments Commission (ASIC) regarding half-year reporting obligations, reflecting the trust's relatively short trading history and existing disclosure practices. Additionally, the responsible entity has decided to defer the first quarterly off-market buy-back, originally scheduled for late September, citing current market demand and liquidity conditions. This decision underscores a cautious approach to capital management amid evolving market dynamics.
Looking Ahead
As MA Credit Income Trust embarks on this capital raising, investors will be watching closely to see how the proceeds enhance the trust's private credit portfolio and whether the offer achieves full subscription without underwriting support. The trust's focus on credit discipline and proprietary origination remains central to its strategy, aiming to deliver consistent returns in a competitive credit market.
Bottom Line?
The success of MA1’s $190.5 million entitlement offer will be a key indicator of investor confidence in private credit amid shifting market conditions.
Questions in the middle?
- Will the entitlement offer achieve full subscription without underwriting support?
- How will the additional capital impact MA1’s portfolio performance and risk profile?
- What factors influenced the decision to defer the quarterly buy-back, and when might it resume?
