As at 31 March 2007 Mariner Bridge Investments had $177 million of investments. This compares with $104 million as at 31 December 2006.
The spread of investments across the Company’s four core asset classes is as follows:
| Asset Class |
Total Investment
AUD |
Portfolio Concentration |
| Fixed Income |
86m |
48% |
| Leasing |
61m |
35% |
| Property |
25m |
14% |
| Infrastructure |
5m |
3% |
| Total |
177m |
100% |
To date, the average size of investment has been approximately $10 million and 54% of the investments have been denominated in US dollars. The Company’s policy for foreign currency transactions is to hedge the principal amount and a base return back to Australian dollars.
The investment portfolio is presently weighted toward fixed income and leasing. The pipeline of transaction opportunities being progressed by the Company, however, is concentrated more in infrastructure and, to a lesser extent, property and leasing. It is expected that the Company’s investments will be relatively evenly spread across asset classes over time.
Looking at each asset class in turn:
Fixed Income: This asset class includes senior and subordinated secured loans, as well as investments in securitisation transactions in Australia and the US. Investments in the US securitisation market total AUD38 million across six different transactions which have all involved co-investment with a leading US investment bank. The investments are diversified across the capital structure and across different segments of the underlying US residential market. With the recent volatility in that market, the Company has taken the opportunity to lower the average risk profile of its investments whilst maintaining an expected return which is consistent with the Company’s return targets. The Company is confident about the performance of these investments.
Leasing: Investments to date have been focused in the aviation industry, with smaller amounts in shipping. The Company is progressing new investment opportunities in both these sectors as well as developing transactions that involve leases over smaller sized assets, such as IT equipment and yellow goods.
Property: The Company’s major focus in property is the provision of mezzanine loans and preferred equity, both in Australia and the US. Investments to date include a mezzanine loan to an ASX listed property trust managed by Mariner Financial Ltd that invests in US real estate.
Infrastructure: The Company’s one infrastructure investment to date has been a loan to an ASX-listed infrastructure trust managed by Mariner Financial Limited. Due diligence for other transactions in the renewable electricity industry in Europe and in the water industry in the US are progressing.
Financing
The Company has now arranged access to a total of $130 million of loan facilities with Commonwealth Bank, St.George Bank and BankWest. At 31 March 2007, $51 million of these facilities had been drawn.
Outlook
The Company’s pipeline of future investments continues to be robust and diversified by asset class and geography.
The Company’s future investment levels are not always predictable with certainty. The speed with which new transactions are identified and achieve settlement and the extent of repayments within the investment portfolio can be variable. The Company presently expects approximately $30 million of its investments to be repaid over the period to 30 June 2007. This notwithstanding, the Company continues to expect total investments to exceed $275 million by December 2007.
As previously foreshadowed, the Company anticipates undertaking a further equity raising to finance growth. At this time, it is likely that the Company will launch an equity raising, predominantly in the form of a rights issue, by early May 2007. A disclosure document will be made available when the new equity is offered, and any eligible investor who wishes to acquire the new equity will need to complete the application form that will accompany that document.
Mariner Bridge Investments is a lender to and an investor in structured finance transactions in the core asset classes of property, fixed income, leasing and infrastructure. Its objective is to build a diversified portfolio of investments that delivers high returns to shareholders.
|
