If anyone thought the capital markets might take a breather after a frantic end to August, September had other ideas.
uncertain
September → think → ideas
The cheque books stayed open, the broking desks kept humming and another collection of ASX companies went hunting for everything from billion-dollar development funding to a few million dollars of exploration firepower.
asserted
collection → stay → firepower
At the pointy end, UBS helped NEXTDC pull together a whopping $1.1 billion convertible note issue.
asserted
NEXTDC → help → issue
Further down the food chain, the familiar names of Canaccord Genuity, Euroz Hartleys, Bell Potter, Argonaut, Macquarie and Petra Capital were again scattered across some of the bigger books.
asserted
names → scatter → books
Canaccord in particular seemed determined not to surrender the ground it grabbed in the previous Crucible, turning up on the ticket for Aurum Resources, Minerals 260, Bannerman Energy, Wildcat Resources, Nexus Minerals and new listing Innovaero Technologies.
But there was plenty happening away from the big end of town too.
asserted
it → seem → town
JP Equity Partners landed Gateway Mining’s $45 million placement, Alpine Capital appeared on two smaller resources deals and Leeuwin Wealth picked up work on both Manhattan Gold and the Parbo Resources IPO.
asserted
Wealth → land → Gold
Occasionally, brokers weren’t required at all.
asserted
brokers → require → ?
White Cliff Minerals negotiated directly with Hancock Prospecting, while Gandel Metals went straight onto Terrain Minerals’ register in a transaction struck at a hefty premium.
However, having your broker logo on the most tombstones only answers one Crucible question.
asserted
having → negotiate → question
The other is what happened once the confetti stopped falling: how big a haircut was required to get the money away and what did the share price do afterwards?
asserted
price → happen → what
On that score, three of the biggest transactions tracked by the Crucible produced three very different answers.
asserted
three → track → answers
NEXTDC
Raised: $1.1 billion
Structure: Convertible notes due 2031
Pre-raise share price: $12.60
Current share price: $11.40
Post-raise performance: -9.5 per cent
NEXTDC provided the monster deal of the fortnight, raising $1.1 billion through convertible notes maturing in 2031 as Australia’s data-centre boom continues to demand industrial quantities of capital.
asserted
boom → raise → capital
UBS had the box seat as sole arranger, lead manager and bookrunner, putting the investment bank behind comfortably the biggest transaction to pass through this edition of the Crucible.
asserted
UBS → have → Crucible
The proceeds are principally earmarked for NEXTDC’s Australian data-centre development pipeline, giving the company another enormous slug of capital as it builds into the surging demand for digital infrastructure.
asserted
it → earmark → infrastructure
However, while UBS may have been popping the champagne corks after getting the monster transaction away, NEXTDC shareholders have had little cause to join the celebrations.
uncertain
shareholders → pop → celebrations
The stock was sitting at $12.60 immediately before the raising and closed Thursday at $11.40, leaving existing shareholders nursing a 9.5 per cent post-raise share-price headache.
asserted
stock → sit → headache
The comparison is slightly different to a conventional placement because the new capital came through convertible notes rather than ordinary shares.
asserted
capital → come → notes
But from an existing shareholder’s perspective, the scoreboard is brutally simple: the equity is worth 9.5 per cent less than immediately before the deal.
asserted
equity → exist → deal
And that makes the Crucible’s next heavyweight particularly interesting.
asserted
heavyweight → make → ?
MINERALS 260
Raised: $250 million placement plus up to $30 million SPP
Price: 88 cents
Discount to previous close: Nil
Current price: 94 cents
Post-raise performance: +6.8 per cent
Minerals 260 produced the heavyweight conventional equity deal, landing a $250-million two-tranche placement at 88c and offering shareholders another $30M through an SPP aimed at funding its 6.2-million-ounce Bullabulling gold project.
asserted
Minerals → raise → project
Argonaut, Euroz Hartleys and Bell Potter were prominent in the book as joint lead managers, with Canaccord and Morgans also involved as co-lead managers in the syndicate.
asserted
Canaccord → involve → syndicate
The headline number gets even bigger after Franco-Nevada’s separate $170M royalty funding is included, taking the broader Bullabulling funding package to $450M.
Franco-Nevada also committed $30M as a cornerstone to the placement.
asserted
Nevada → get → placement
The company now has $633M of the $855 million in funding required to develop the project, as outlined in its pre-feasibility study.
asserted
company → have → study
Most strikingly, MI6 didn’t have to bribe the market with a discount.
asserted
MI6 → have → discount
The 88c placement matched its previous close and was struck at a premium to its recent VWAP.
asserted
placement → match → VWAP
Investors haven’t complained.
asserted
Investors → complain → ?
The stock finished on Thursday at 94c, leaving placement buyers 6.8 per cent ahead, leaving the company with serious financial muscle to back its multi-million-ounce Bullabulling gold project.
asserted
stock → finish → project
No haircut and a positive aftermarket is about as neat a trip through the Crucible as a company could hope for.
uncertain
company → hope → Crucible
AURUM RESOURCES
Raised: $52.5 million
Price: 55c
Discount to previous close: 0.9 per cent
Current price: 54c
Post-raise performance: -1.8 per cent
Aurum Resources provided perhaps the best contrast of the headline trio.
asserted
Resources → raise → trio
Canaccord acted as global coordinator, sharing the joint lead manager and joint bookrunner duties with Bell Potter.
asserted
Canaccord → act → Potter
Stifel Nicolaus joined the fray as co-lead manager, pulling together a $52.5 million placement at 55c, just a whisker below Aurum’s 55.5c pre-halt close.
asserted
Nicolaus → join → close
Notably, $32.3M came from new and existing strategic investors, with the other $20M from global institutions.
asserted
M → come → institutions
That is serious backing for a company pushing its 3.22-million-ounce Boundiali gold project in Côte d’Ivoire towards development.
asserted
That → push → development
Aurum expects to emerge with more than $95 million in the bank and plans to start spending on long-lead plant items, access roads and land for the proposed plant and tailings facilities, ahead of a definitive feasibility study shortly slated for completion.
asserted
Aurum → expect → completion
The company’s 16-rig drilling fleet, meanwhile, is attacking a massive 150,000-metre program at Boundiali, with another 30,000m planned for its nearby 1.16-million-ounce Napié project.
asserted
m → attack → project
At today’s 54c close, the market is trading 1.8 per cent below the placement price.
asserted
market → trade → price
However, the new placement shares aren’t due to come onto the boards until September 30, so for now it is more a mark-to-market snapshot than a return placement punters can chalk up on the scoreboard.
asserted
punters → come → scoreboard
If the big books demonstrated institutional appetite, Bannerman Energy showed uranium can still command a serious audience.
asserted
uranium → demonstrate → audience
The developer secured a fully underwritten $124-million placement at $4.00 per share, with another $10M targeted through an SPP.
asserted
M → secure → SPP
Macquarie and Canaccord headed the syndicate as joint lead managers, joint underwriters and joint bookrunners, with Jett Capital involved as co-lead manager and Shaw & Partners, Euroz Hartleys and Wallabi joining the book as co-managers.
asserted
Shaw → head → managers
The 5.4 per cent discount wasn’t savage, although today’s $3.82 close leaves the stock 4.5 per cent below the placement price, not quite the welcome-home party subscribers might have ordered.
uncertain
subscribers → leave → party
…and 47 more, not listed.
The Aporia
