Sygnus Credit eyes BVI, new deals in APO
WITH a robust investment pipeline and new opportunities arising through the Caribbean, Sygnus Credit Investments Limited (SCI) is looking to raise US$32 million ($4.8 billion) in its additional public offering (APO) which is set to open this Friday.
The St Lucian-based company, which has only been in operation for less than four years, is seeking to raise additional funds for their upcoming deals valued at around US$40 million ($5.7 billion) according chief investment officer of the Sygnus Group, Jason Morris. This would be on top of SCI’S Us$60.3-million credit portfolio which has increased by 121 per cent in the last year, despite the COVID-19 pandemic hampering economic activity across the region.
Although Morris wasn’t privy to explain which companies would be the target of the new funds, he confirmed that SCI would be deploying capital to the British Virgin Islands along with the Eastern and Dutch Caribbean, which arose from the partnerships built over time.
He also revealed that SCI would be increasing their leverage and would possibly seek board permission to raise more debt, which Morris said would be two to three deals based on the outstanding amount to be raised. The credit portfolio according to Morris is providing a yield of 12 per cent and trading at a pandemic opportunity of about of 1.3, which is much lower than North American comparatives.
“We have board approval to raise US$50 million and the APO is intended to raise up to US$32 million. This would suggest that US$18 million remains to be raised in debt. However, based on the demand on the pipeline, it is highly likely that substantially more debt will have to be raised before the end of the 12 months,” Morris said at the company’s annual general meeting held yesterday at Terra Nova Allsuite Hotel.
SCI has managed to thrive in the pandemic based on its first-quarter net profit which rocketed by 51 per cent to US$797,840 ($119.1 million) for September 30. SCI has continued to benefit from no realised credit losses, with one portfolio company back to general operations following the March lockdown. Even with the varying changes across the region Morris indicated that SCI has utilised the expertise of the Sygnus Group to mitigate the changing regime in St Lucia.
In explaining the APO benefit to shareholders, Morris indicated that the APO has been 80 per cent reserved for shareholders with a 10 per cent discount to the general public price. Morris also explained that shareholders can subscribe to both classes of shares in Jamaican dollars and USD once they were on record as of November 20. He further elaborated that SCI would be achieving its Us$100-million ($15-billion) portfolio target two years early due to the significant interest for private credit in the current crisis.