Why Is CVC Raising $75 Million Through New Redeemable Notes Now?

Overview of the Offer

CVC Limited has lodged a replacement prospectus dated 20 November 2025 for the offer of its third series of redeemable notes, known as CVC Notes 3. The offer comprises 750,000 notes with a face value totaling $75 million, with the flexibility to raise more or less depending on investor demand. These notes are unsecured, non-convertible, and unsubordinated, designed to provide investors with quarterly floating interest payments at a margin of 4.5% above the 3-month BBSW rate.

The notes mature on 11 December 2028, unless redeemed earlier, and are expected to be quoted on the ASX under the code CVCHB. The offer includes a New Money component open to eligible investors and a Reinvestment Offer exclusively for holders of CVC’s existing CVCHA notes, allowing them to exchange their holdings on a one-for-one basis with a cash incentive.

Strategic Purpose and Use of Proceeds

The capital raised through this offer forms a key part of CVC’s ongoing capital management strategy. The proceeds will be used primarily to redeem outstanding CVCHA notes that do not participate in the Reinvestment Offer, repay existing debt facilities, and fund general corporate purposes, including new and existing real estate investment opportunities. CVC’s portfolio is heavily weighted towards property investments, with a focus on high conviction real estate projects across Australia.

As of 30 June 2025, CVC reported net assets of approximately $181.8 million, with a property portfolio valued at around $299.8 million on a statutory basis. Independent valuations suggest a significant uplift in property values, potentially increasing the portfolio’s worth to over $600 million. Key projects include developments and rezoning efforts in Marsden Park, Donnybrook, Liverpool, and several sites in Victoria and Queensland.

Investment Risks and Considerations

Investors should be aware that CVC Notes 3 carry risks typical of hybrid debt instruments. Liquidity risk is notable, as the market for these notes may be limited, potentially affecting the ability to sell prior to maturity at favorable prices. Interest payments, while quarterly and floating, are not guaranteed and depend on CVC’s cash flow from its investment portfolio.

Other risks include potential early redemption by CVC under certain regulatory or corporate events, interest rate fluctuations impacting the attractiveness of the notes, and the inherent risks associated with property development and market conditions. The notes rank behind secured creditors but ahead of ordinary shareholders in the event of insolvency.

Governance and Offer Management

The offer is managed by E&P Capital Pty Limited, which acts as Lead Manager and Arranger, while Melbourne Securities Corporation Limited serves as Trustee. The prospectus includes detailed terms of the notes, financial information, risk disclosures, and corporate governance policies. The Board of CVC, led by Executive Chairman Craig Treasure and Managing Director Mark Avery, emphasizes a disciplined investment approach focused on capital preservation and value creation.

Applications for CVC Notes 3 must be made through brokers, with eligibility criteria ensuring compliance with recent financial product distribution laws. The offer is not open to U.S. persons and is restricted to Australian investors.

Looking Ahead

CVC anticipates deploying the proceeds within six to twelve months post-offer close, targeting property financing and principal investment opportunities. While the offer strengthens CVC’s balance sheet and investment capacity, investors should monitor subscription levels, potential scale-backs, and the liquidity of the notes once trading commences on ASX.