Sygnus Credit Investments Limited (SCI) is looking forward to increased regional investments with US$3.90 million in dry powder on its balance sheet, at the end of Q1 Sep 2020.
Additionally, the company had US$5.0 million in undrawn credit facilities, for a total of US$8.9 million available for investments.
Directors said, in comments attached to the quarter’s results, that SCI had adequate available capital to finance the US$4 million in investment commitments at the end of the quarter, and new investment opportunities that were going through credit approval.
However, they note that in order to finance SCI’s investment pipeline across the Caribbean region, the company will seek to raise additional capital.
To this end, the Board authorised a capital raise of US$50 million or equivalent local currency, in equity and debt, at a Board meeting held on November 11, 2020. The equity capital will be raised via an additional public offering (APO), which was approved by shareholders at an extraordinary general meeting held in September 2020.
Directors stated, “SCI is far advanced with the prospectus for the APO, a draft of which was filed with regulators.”
They said SCI will seek raise additional capital via the debt markets to complete the US$50 million capital raise after exhausting the equity capital from the APO
Directors said the authorised raise of US$50 million equivalent in equity and debt capital is to finance SCI’s continued private credit expansion across the Caribbean region, with a material pickup in demand for flexible debt capital by high-quality middle-market businesses.
For the three months ended September 30, the company reported record core revenues and a 51 per cent increase in net profits.
SCI’s core revenues, or total investment income, grew by 19.8 per cent or US$216.4 thousand to a record US$1.31 million, for the three months ended September 30, compared with US$1.09 million for the three months ended September 30, 2019.
Of SCI’s core revenues, 98.2 per cent were comprised of net interest income.
SCI’s core earnings, or net investment income, grew by 3.9 per cent or US$31.8 thousand, to US$839.0 thousand for Q1 Sep 2020, versus US$807.2 thousand for Q1 Sep 2019.
Net profit attributable to shareholders grew by 51.1 per cent or US$269.9 thousand to US$797.8 thousand for Q1 Sep 2020, versus US$527.9 thousand for Q1 Sep 2019.
This increase was primarily driven by larger management fees due to a 71.9 per cent increase in assets under management, and corporate services fees which began accruing on January 1, 2020.
Management fees (64.5 per cent) and corporate services fees (12.5 per cent) were a combined 77.0 per cent of total operating expenses.
Management fees were US$303.0 thousand for Q1 Sep 2020, up 51.0 per cent or US$102.3 thousand higher than the US$200.7 thousand for Q1 Sep 2019.
SCI’s non-performing investment rate (NPI) was 2.3 per cent of SCI’s total Portfolio Company investments. This represented one portfolio company investment, whose terms are being restructured.
Directors said the investment is fully collaterised and was placed on non-performing status in March 2020.
“SCI does not anticipate any realised losses from this investment over the medium term.” The company declared an interim dividend of US$0.00249 per share to all shareholders on record as of September 28, 2020, with an ex-dividend date of September 25, 2020. The dividend was paid on October 16, 2020.