The upcoming float of urban renewal company URB Investments has received a fillip with research house Lonsec giving the offer an investment grade rating.
The rating gives URB access to thousands of additional investors as an investment grade rating allows financial planners to pitch the initial public offering to SMSF and high net worth clients.
Washington H Soul Pattinson and BKI shareholders are being offered priority allocations as part of the IPO.
The float has also been given a ‘recommended’ rating by Independent Investment Research. Listed investment companies like URB pay ratings houses fees to take a look under the bonnet, in an effort to obtain favourable ratings.
Research houses note, however, fees received are not linked to the outcome of their ratings.
A national roadshow started this week and the key test will prove to be investor appetite for the IPO at current pricing.
The IPO is being run by joint lead managers CBA, Morgans and Bell Potter, with the issue price set at $1.10 per share. Investors will receive one option for every share issued.
The company plans to raise a minimum of $75 million and a maximum of $300 million.
The IPO will be one of the post reporting season crop. URB is set to list on the ASX on April 7 and will seek to invest in a 50-50 split of equities as well as direct property assets that are exposed to urban renewal and regeneration.
The company has arranged for more than $59 million worth of property purchases as its seed investments.
URB will be externally managed by Contact Asset Management chief executive Tom Millner and portfolio manager Will Culbert, and is focusing on properties in areas where new infrastructure investment has been confirmed or is underway.
URB is also looking to buy into about 35 listed equities out of about 89 it had identified as having some positive exposure to the massive infrastructure investment currently underway, including Transurban, Lendlease, Goodman Group, Qube and Ramsay Health Care.