The successful completion of a major funding deal cements IAM’s place as a market leader in Australia’s fixed income capital markets.

Shares in Income Asset Management (ASX:IAM) rose by around 5% this morning, after the diversified capital markets business confirmed its key role in a major ASX fintech finance facility.

Through its fixed income capital markets division, IAM confirmed it had secured an $85m warehouse funding facility for consumer finance platform MoneyMe (ASX:MME).

The funding deal backs MoneyMe’s headline acquisition of fellow fintech lender SocietyOne – a marquee move aimed at creating a major new player with the balance sheet strength to compete with Australia’s big four banks.

And it reflects ongoing demand for private debt in Australia’s capital markets – a field where IAM has clearly established a first-mover advantage with the opportunity for further growth.

 

Strong momentum

With the completion of the transaction, IAM expects to jump straight into cash-flow positive territory for March – a major milestone since its strategic restructuring just 12 months ago.

 

Vertically integrated

Along with its fixed income capital markets business, IAM now has a streamlined model that includes two other verticals — cash investments and funds management.

Today’s word only adds further momentum to what was already a strong half for the group, where it posted a 100% lift in revenues year-on-year.

The revenue boom was driven by sharp increases for placement fees and trading income, as bond market conditions continue to strengthen.

“We are delighted with the growth of IAM Capital Markets and see growing demand for secure, high yield floating rate notes that are an excellent hedge against rising inflation,” said Kyle Lambert, co-head of IAM Capital Markets.

Lambert added that the MoneyMe deal is just one among a number of key transactions executed by the business as companies continue to see value in fixed income debt structures.

In addition, “our pipeline for similar transactions in the coming months is growing as corporates seek alternatives to bank and equity financing”, he said.

For Clayton Howes, CEO of MoneyMe, the successful completion of such a large complex deal reflected the strength of IAM’s management team.

“The ability of the IAM team to deliver a significant financial transaction in one of the most volatile periods globally demonstrates their capability and professional execution.”

Howes added that the widespread of investors who participated in the deal demonstrated a strong belief in the market about the prospective value of a major new competitor to the Big 4 banks.

“We are pleased with the strong demand from institutions and wholesale investors to facilitate our growth,” Howes said.

 

This article was developed in collaboration with Income Asset Management, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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