Strong start for ECM in 2018

The first few months of 2018 have seen strong volumes of equity raisings in the Australian market, and the outlook for the remainder of the year is promising.

The Allens Equity Capital Markets (ECM) team has had a busy start to 2018, having advised on a number of significant deals since January worth more than $3.5 billion.

According to Allens' Co-Heads of Equity Capital Markets, Julian Donnan and Robert Pick, the level of ECM activity to date in 2018 has been positive, and the pipeline of work indicates that these encouraging levels of activity should continue.

'As we have come through the reporting season, we've been involved with a number of capital raisings that have come to market and been well supported by investors,' Mr Donnan said.

'These secondary capital raisings have been undertaken for a range of funding requirements – for acquisition funding, regulatory capital requirements and for strengthening balance sheets – and show that there is a deep pool of capital available to support equity raisings by ASX-listed companies.'

'As we enter the next IPO window over the coming couple of months, the market's appetite to invest in new issuers will be tested,' Mr Pick said.

'We have seen one or two large IPOs being deferred, but there are a number of larger and mid-size IPOs that remain on track to come to market.

'However, outside of IPOs, the pipeline of probable secondary raisings looks promising. And we expect this to be not just via the usual institutional placements and entitlement offers, but we also see a resurgence of other equity-like funding solutions such as offerings of convertible bonds into the institutional markets.'

Already in 2018, Allens has advised:

• Westpac on its $1.45 billion offer of Capital Notes 5.
• J.P.Morgan and Deutsche Bank as joint underwriters of APA Group's $500 million accelerated entitlement offer.
• CBA (as arranger) and CBA, ANZ Securities, Morgan Stanley, Morgans Financial and Westpac Institutional Bank (as joint lead managers) on CBA's $750 million offer of PERLS X.
• Macquarie as underwriter of CleanTeq Holdings' $150 million institutional placement.
• Deutsche Bank as bookrunner on Seven Group Holdings' $350 million convertible bond offering
• Macquarie as underwriter of Smartgroup's $75 million institutional placement.
• AJ Lucas on its $54 million institutional placement and accelerated entitlement offer.
• The joint lead managers on the offer from MCP Master Income Trust to raise up to approximately $300 million.

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