Sygnus Credit IPO rakes in $3.8B

Some 3,200 applications with more than $3.8 billion chased after the Sygnus Credit Investments offer of 90,909,091 ordinary shares preliminary data out of the company is indicating.
The company went to the market to raise J$1.3 million but can upsize the amount it takes in case of oversubscription of the offer.
The offer is expected to close on Wednesday, May 16 received applications from Jamaicans and persons from overseas, including the wider Caribbean, was informed. The company is likely to take up approximately 60 percent of the excess demand in keeping with the terms in the Prospectus that gave them the right to uplift the take in case of oversubscription.
With the oversubscription, the total issued shares projected to be just over 250 million units should end up at just over 300 million ordinary shares.
Sygnus Credit Investments is a specialty private credit investment company dedicated to providing non-traditional financing to medium-sized firms across the wider Caribbean region. These companies typically have revenues between US$5 million and US$25 million.
The investment objective of the Company is to generate attractive risk adjusted returns with an emphasis on principal protection by generating current income, and to a lesser extent capital appreciation, through investments primarily in Portfolio Companies using private credit instruments.
The company’s capital structure and the choice of investing the funds will tend to result in a return closer to fixed interest levels, but likely higher than some bank lending rates. In short to medium term, investors should be looking for steady growth but relatively high dividend payments in the medium term. The falling interest rates on Jamaican dollar money market instruments will make the dividend payment a very attractive source of income.
The company intends to pay out up to 85 percent of its net income as dividends to shareholders, payable on a quarterly basis. The target dividend yield is over 7 percent on the IPO price.
In December 2017, SCI had US$16.7 million in assets and generated net profits of US$660,855. The value of the investment in Portfolio Companies was US$11.6 million, generating a yield of 10.3 percent.
Earnings for the 2019 fiscal year could be around J$1-1.2 per share and that could see the stock trading between $15 and $20 within twelve months. Returns could be greater if they use borrowed funds to meet some of their demand for funding.
The Company currently has a robust pipeline of US$31.4 million in deals to finance, of which US$3.2 million has been approved, US$12.3 million has been mandated and US$15.9 million are at various stages of prospecting.

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