IAM Completes $175m Capital Raise for One Rail Australia
Income Asset Management (ASX: IAM) announced today it has provided funding as part of a A$175 million Medium Term Note (MTN) issuance by Magnetic Rail Group (MRG).
MRG is the parent of One Rail Australia Holdings (ORA), a leading rail freight and logistics business in Australia and the second largest rail operator by volume in the Hunter Valley, with a significant and growing presence in Queensland. The MTN issuance provides a funding platform that will enable ORA to focus on its next phase of growth.
IAM was named as lead manager on the transaction and provided a cornerstone commitment to the issuance.
IAM’s chief executive officer Jon Lechte, said the investment would provide investors with access to high performing infrastructure assets, backed by strong sponsors.
“One Rail Australia, owned by Magnetic Rail Group, has delivered consistent growth in recent years, and it has secure, long-term contracts in place with its clients. We were impressed with its approach to ensuring efficient operations and keeping maintenance requirements low,” Mr Lechte said.
“IAM supports sectors that investors see value in and in industries that are critical to the economy. We look forward to continuing to deliver transactions in this sector.”
The transaction secured strong investor support from institutional and high-net-worth investors, with all notes to be settled in May and trading now in the professional market.
The Medium Term Note is BB rated (S&P), has a coupon of 9.25 per cent and will mature in May 2030.
Lee Ritchie, chief financial officer at One Rail Australia said the strong support received from investors reflects the robust fundamentals of the business and the critical role the Group plays in supporting our customers logistics needs.
“The Group is very pleased to have completed the MTN issuance, which was undertaken as part of a broader refinancing, and which positions the business for future growth.”
To date, this transaction for One Rail Australia brings the total of all issuances from IAM to A$1bn across many sectors, in both loan format as well as bonds.
