PCI’s $267M Entitlement Offer Raises Questions on Dilution and Distribution Impact
Perpetual Credit Income Trust (PCI) has announced a $267 million entitlement offer priced at a 9.1% discount, aiming to bolster its investment capacity. The offer includes a shortfall facility and top-up options for eligible unitholders and wholesale investors.
- Pro-rata non-renounceable entitlement offer to raise ~$267 million
- Offer price set at $1.10 per unit, 9.1% discount to recent closing price
- Includes top-up facility and shortfall offer for additional subscriptions
- Funds to support expanded investment activity aligned with current strategy
- New units to commence trading on ASX from 3 December 2025
Capital Raise Details
Perpetual Credit Income Trust (PCI) has announced a significant capital raising initiative through a pro-rata non-renounceable entitlement offer. Eligible unitholders in Australia and New Zealand are invited to subscribe for one new unit for every two units held, at an offer price of $1.10 per unit. This price represents a 9.1% discount to the Trust’s closing price on 7 November 2025, reflecting a strategic move to attract participation and raise approximately $267 million.
The offer is structured to include a top-up facility, allowing unitholders who fully subscribe to their entitlement to apply for additional units beyond their initial allocation. Additionally, a shortfall offer will be extended to certain wholesale investors to subscribe for any units not taken up under the entitlement and top-up offers. This layered approach aims to maximize capital raised while providing flexibility for investors.
Purpose and Strategic Implications
The proceeds from this capital raise are earmarked to empower the Trust’s Investment Manager to actively pursue new investment opportunities consistent with PCI’s existing investment strategy. This suggests a proactive stance toward portfolio expansion or repositioning, potentially enhancing future income streams and distribution capacity for unitholders.
New units issued under the offer will rank equally with existing units, including entitlement to future distributions from the date of issue. This parity ensures that new investors will participate fully in the Trust’s income profile, maintaining fairness across the unitholder base.
Offer Timetable and Management
The entitlement offer opens on 18 November 2025 and closes on 27 November 2025, with new units expected to be issued on 2 December and commence trading on the ASX from 3 December. The shortfall offer closes earlier on 13 November, allowing wholesale investors to participate promptly.
Notably, the offer is not underwritten, which introduces some uncertainty regarding the final amount raised. The allocation of any excess demand under the top-up and shortfall facilities will be managed by the responsible entity and investment manager in consultation with joint lead managers, applying a pro-rata scale-back if necessary.
Market and Investor Considerations
By pricing the offer at a discount, PCI aims to incentivize participation amid a competitive market environment. The capital raise reflects confidence in the Trust’s investment strategy and a commitment to growth, but also raises questions about dilution and the impact on unit price and distributions in the near term.
Investors will be watching closely how the funds are deployed and whether the new investments translate into enhanced returns. The absence of underwriting means the Trust must rely on strong unitholder support and wholesale investor appetite to meet its capital targets.
Bottom Line?
PCI’s $267 million entitlement offer marks a pivotal step in expanding its investment footprint, but subscription uptake and deployment execution will be key to watch.
Questions in the middle?
- How will the Trust deploy the new capital to generate enhanced returns?
- What level of participation will the entitlement and shortfall offers achieve without underwriting?
- How might the increased unit base affect future distributions and unit price performance?