September 19, 2021

Suncorp (ASX: SUN) share price on watch in $ 350 million fundraiser

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The Suncorp Group Ltd. (ASX: SUN) the share price will be under surveillance this morning after the latest capital raising announcement from the financial group.

Focus on Suncorp share price after unveiling of $ 350 million fundraiser

Suncorp launched a Capital Notes 4 offering this morning as it seeks to raise $ 350 million. The Notes will be traded on the Australian Securities Exchange (ASX) under the ticker SUNPI from September 24, 2021.

The Capital Notes 4 will have a face value of $ 100 with a minimum investment of $ 5,000 and in multiples of 10 (ie $ 1,000) thereafter. Suncorp’s share price will be one to watch early in trading after the company unveils its latest plans to raise capital in the market.

Principal Notes like these are a more flexible way for companies like Suncorp to raise funds.

They are more of a hybrid instrument with a mix of bond and equity type characteristics. Capital Notes can help reduce the cost of capital and provide flexibility in the capital structure of the financial group.

The Capital Notes 4 will have fully franked distributions paid quarterly, similar to a dividend, at the 3-month Bank Bill Rate (BBSW) rate plus a margin of 2.90% to 3.10% per annum (more like a bond coupon). ).

Suncorp’s stock price will be on the radar today after a strong August. Shares of the Australian financial group rose 7.5% in the past month ahead of Monday’s opening.

What’s moving Suncorp right now?

Much of the gain came on Monday, August 9, after Suncorp’s last annual result. Suncorp’s share price jumped 7.8% after the company unveiled strong earnings growth and a $ 250 million share buyback program.

Here are some of the main takeaways from the result:

  • Revenue down 4% from the previous corresponding period (pcp) to $ 14.2 billion.
  • Cash gains up 42% on pcp to $ 1.1 billion.
  • Net profit after tax up 13% on pcp to $ 1.0 billion.
  • Final dividend per share of 40 cents and special dividend of 8 cents.

Suncorp’s share price rose following the announcement, as the company said it was focusing on sustainable return on equity.


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