About the Issuer
Capitol (ASX: CAJ) is a large community based (nonhospital/non-aligned) diagnostic imaging (DI) provider that
employs over 700 staff and contractors across 70 facilities
in Victoria and NSW. Capitol is the 5th largest participant in
the DI market with a 6% market share of its addressable
market. It was established in 2001, listed in 2007 (through
a reverse takeover) and had a market capitalisation of
c$100m as at April 2016.
The issuer need
During 2015 Capitol made several large acquisitions for
c$150m funded by a combination of bank debt and equity
raisings. After this there was a requirement to re-set
Capitol’s debt funding structure to more adequately
address the needs of the business going forward. Capitol
sought the security of longer term financing to effectively
mitigate the risk associated with refinancing its existing
facilities.
The FIIG solution
By issuing a Senior Unsecured bond into the capital
markets, Capitol was able to term out a portion of their
capital structure, diversify its funding profile and reduce
the refinance risk associated with the existing banking
facilities. The group also gained access to a new source of
capital and exposure through the FIIG distribution
network.
Client testimonial
Capitol Health Managing Director John Condi said “We
continue to have a very strong relationship with our senior
lender National Australia Bank, but the note issue
demonstrates our diligent approach to capital
management and determination to diversify our funding
sources.”