Credit Update – KeyInvest

Private Debt (+ KeyInvest Capital Notes Opportunity)

Private debt in the investing space is a growing market where senior secured loans,
unsecured lending, asset-backed lending, asset-backed senior/junior and mezzanine exist for
a wide range of investors. Attractive returns are available in private debt through providing
the capital quickly, while banks and large institutions have looked to exit. Private debt also
offers lower hypothetical volatility versus Aggregate fixed income and Global high yield.
Please see our recent private credit presentation including the new IAM Originated Private
Debt Deal.

KeyInvest Capital Notes Opportunity

We see value in the KeyInvest Capital Notes for investors looking for an attractive yield.
These capital notes are perpetual, convertible, subordinated debt obligations of the issuer.
The proceeds of this issuance are being used to fund the acquisition of 50% interest in
Keystone Capital Limited. The coupon is 3m BBSW +9% (fully franked).
KeyInvest is an APRA regulated life company, friendly society, and mutual. It has a 145-year
history and was originally part of IOOF. KeyInvest has diverse business experience in a range
of markets, having operated as a credit union, retirement village developer and operator and
mortgage broker but funds management has always been core. Currently, KeyInvest has
AUD408m FUM (funeral & investment bonds) with AUD280m within the funeral bonds
business having a 25% allocation to the mortgage asset class.

The plan with KeyInvest and Keystone Capital is to scale the business. Australian ADIs are facing capital constraints and have limited appetite for short term property development financing, resulting in a growing demand for private credit financing.

as at 06/07/2023

Source: IAM Bloomberg

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