Unsecured and Deferrable: Risks Loom in Stonepeak-Plus $300M ASX Debt Offer
Stonepeak-Plus Infra Debt Limited has launched an offer for up to $300 million in unsecured, deferrable, floating rate notes, targeting infrastructure debt investments. The notes, to be listed on the ASX as SPPHA, aim to deliver monthly income linked to BBSW plus a margin, with a seven-year maturity.
- Offer of up to 3 million unsecured, deferrable, redeemable floating rate notes
- Target raise of $200 million minimum, $300 million maximum
- Notes pay monthly floating rate interest, BBSW (1 Month) + 3.25%, stepping up to 4.25%
- Primary investment focus on Australian and New Zealand infrastructure debt exposures
- First loss buffer supported by equity investor shares and junior notes held by Stonepeak entities
Introduction to the Offer
Stonepeak-Plus Infra Debt Limited has announced a significant capital raising through the issuance of up to 3 million unsecured, deferrable, redeemable floating rate notes, known as the Stonepeak-Plus INFRA1 Notes. The offer aims to raise between $200 million and $300 million, with the notes intended to be listed on the Australian Securities Exchange (ASX) under the ticker code 'SPPHA'.
The notes offer investors monthly floating rate income, calculated as the one-month Bank Bill Swap Rate (BBSW) plus a margin of 3.25% per annum, which will increase to 4.25% after six years if the notes are not redeemed by then. The maturity of the notes is set at seven years, with a target repayment date at six years.
Investment Strategy and Portfolio Composition
The Issuer’s investment strategy primarily targets infrastructure debt exposures in Australia and New Zealand, with some allocation to select global markets. The portfolio will focus on sectors such as transport and logistics, digital communications, energy and energy transition, and social infrastructure. A secondary allocation, expected to be less than 30% on average, will be made to diversifying assets including asset-backed finance, corporate credit, and liquid assets to enhance portfolio diversification and liquidity.
To facilitate early deployment, the Issuer plans to acquire an Initial Portfolio comprising a large structured investment arrangement referencing 49 underlying infrastructure debt exposures and a senior secured loan to a large-scale offshore wind project in the Asia-Pacific region. These assets have been recently acquired by Stonepeak and will be transferred to the Issuer at cost, subject to final approvals.
Structural Features and Credit Enhancement
The notes are unsecured and not guaranteed by Stonepeak or any other party. To provide credit enhancement, the Issuer will maintain a first loss buffer through equity investor shares and junior notes, initially held by Stonepeak entities. This buffer is designed to absorb initial losses before impacting noteholders.
Interest payments on the notes are deferrable if the Issuer’s underlying investments do not generate sufficient income in any month. Deferred interest accrues at the same rate and is payable when income allows. The notes are redeemable by the Issuer on any interest payment date, with early redemptions within 24 months attracting a 1% premium.
Governance and Management
The Issuer is a newly incorporated Australian public company and is managed by Stonepeak-Plus Infra Debt Management Pty Ltd, a majority-owned subsidiary of Stonepeak Group. Stonepeak is a global infrastructure investment firm managing $115 billion in assets with a dedicated credit team of 28 professionals. The Issuer’s board includes independent and executive directors with extensive infrastructure and credit experience.
Robust governance frameworks are in place, including conflict of interest policies and an independent director to oversee related party transactions. The Manager’s investment decisions are reviewed by an investment committee comprising senior Stonepeak executives.
Risks and Considerations
Investors should be aware that the notes carry risks including credit risk, liquidity risk, interest rate fluctuations, and potential conflicts of interest given the Manager’s relationship with Stonepeak Credit Funds and related entities. The Issuer and Manager are newly formed entities without a standalone track record, although Stonepeak’s broader experience provides some operational foundation.
The notes are not simple corporate bonds and do not guarantee interest or principal repayment. Market liquidity for the notes may be limited, and trading prices may fluctuate below face value. The Issuer may defer interest payments if income is insufficient, and investors have no right to request early redemption except in limited circumstances.
Offer Details and Investor Access
The offer is open to wholesale and retail investors within the defined target market, with retail investors required to obtain personal financial advice and apply through brokers. The offer is not underwritten, and the full $300 million has been allocated under the cornerstone offer, with no further allocations expected under the broker firm offer.
Successful applicants will receive holding statements by early December 2025, with trading on the ASX expected to commence shortly thereafter. The Issuer will provide quarterly portfolio reporting to investors, enhancing transparency on portfolio composition, credit quality, and performance.
Bottom Line?
As Stonepeak-Plus Infra Debt Limited embarks on this inaugural ASX debt listing, investors will keenly watch the portfolio’s credit performance and market reception to gauge the viability of infrastructure debt as a stable income source in Australia’s fixed income landscape.
Questions in the middle?
- How will the Initial Infrastructure Loan’s finalisation impact the portfolio’s risk and return profile?
- What liquidity dynamics will emerge in the secondary market for these unsecured, deferrable notes?
- How effectively will Stonepeak manage potential conflicts of interest given its multiple roles in the portfolio?
