BURFORD CAPITAL ANNOUNCES PRICING AND UPSIZING OF PRIVATE OFFERING OF SENIOR NOTES

Rhea-AI Summary

Burford Capital Limited announces the pricing of its private offering of $275.0 million aggregate principal amount of additional 9.250% senior notes due 2031, representing an increase from the previously announced offering size. The offering is expected to close on January 30, 2024, and the net proceeds will be used for general corporate purposes. The Securities have not been registered under the US Securities Act of 1933 and may only be offered to Qualified Institutional Buyers or non-US persons outside the United States.

Insights

Financial Analyst

Burford Capital's decision to increase the offering size of its senior notes is a strategic move that could indicate the company's confidence in its financial position and growth prospects. The high interest rate of 9.250% is notably above current average corporate bond yields, which suggests the market may perceive a higher risk associated with the investment or that Burford is willing to offer a premium to attract investors. The yield to worst of 8.251% is a critical figure for investors as it represents the lowest potential yield that can be received on the bond without the issuer actually defaulting.

Investors will need to consider the implications of the senior unsecured guarantee by Burford's subsidiaries. This suggests a strong commitment to meeting its debt obligations, which could be seen as a positive indicator of Burford's creditworthiness. However, the unregistered nature of the securities limits their marketability and is something investors must weigh against the potential returns.

Legal Expert

The offering's restriction to 'Qualified Institutional Buyers' and non-US persons under Regulation S indicates a targeted approach to raise capital while complying with securities regulations. The exemption from registration under the Securities Act leverages Rule 144A, which allows for a more expedited and less public offering process, but also restricts the resale of the securities. This legal structuring is important for understanding the liquidity and regulatory risk associated with these Additional Notes.

Market Research Analyst

By analyzing the broader market trends, it's evident that Burford Capital's move to issue additional senior notes could be a response to favorable market conditions for debt financing or a need to secure capital for upcoming investments or debt obligations. The use of proceeds for 'general corporate purposes' is quite broad, which might raise questions about the specific strategic initiatives or financial maneuvers the company plans to undertake. Investors often look for more detailed allocations to assess the potential impact on the company's growth and profitability.

NEW YORK, Jan. 16, 2024 /PRNewswire/ -- Burford Capital Limited ("Burford" or "Burford Capital"), the leading global finance and asset management firm focused on law, today announces the pricing of its private offering of $275.0 million aggregate principal amount of additional 9.250% senior notes due 2031 (the "Additional Notes") by its indirect, wholly owned subsidiary, Burford Capital Global Finance LLC (the "Issuer"), which represents an increase from the previously announced offering size. The Additional Notes will be guaranteed on a senior unsecured basis by Burford Capital as well as Burford Capital Finance LLC and Burford Capital PLC, both indirect, wholly owned subsidiaries of Burford Capital (such guarantees, together with the Additional Notes, the "Securities"). There is $400.0 million aggregate principal amount of the Issuer's 9.250% senior notes due 2031 (the "Initial Notes") outstanding as of the date hereof. The Additional Notes will initially be offered to investors at an offering price equal to 103.625% of the principal amount thereof, plus accrued interest from January 1, 2024, representing a yield to worst of 8.251%. The offering is expected to close on January 30, 2024. If issued, the Additional Notes will be issued as "Additional Notes" under the indenture pursuant to which the Issuer previously issued the Initial Notes, will have identical terms to the Initial Notes (other than with respect to the date of issuance, the issue price and the first interest payment date) and will be treated as a single class for all purposes under such indenture.

Burford Capital intends to use the net proceeds from the offering of the Securities for general corporate purposes.

The Securities have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act"), or the laws of any other jurisdiction and may not be offered or sold within the United States or to, or for the account or benefit of, US persons absent registration or an applicable exemption from registration under the Securities Act or any applicable state securities laws. The Securities will be offered only to persons reasonably believed to be "Qualified Institutional Buyers" within the meaning of Rule 144A under the Securities Act or non-US persons outside the United States pursuant to Regulation S under the Securities Act, in each case, who are "Qualified Purchasers" as defined in Section (2)(a)(51)(A) under the US Investment Company Act of 1940, as amended.

About Burford Capital
Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with companies and law firms around the world from its offices in New York, London, Chicago, Washington, DC, Singapore, Dubai, Sydney and Hong Kong.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities of Burford.

This announcement does not constitute an offer of any Burford private fund. Burford Capital Investment Management LLC, which acts as the fund manager of all Burford private funds, is registered as an investment adviser with the US Securities and Exchange Commission. The information provided in this announcement is for informational purposes only. Past performance is not indicative of future results. The information contained in this announcement is not, and should not be construed as, an offer to sell or the solicitation of an offer to buy any securities (including, without limitation, interests or shares in any of Burford private funds). Any such offer or solicitation may be made only by means of a final confidential private placement memorandum and other offering documents.

Prohibition of sales to retail investors in the European Economic Area. The Securities are not intended to be offered, sold or otherwise made available to, and should not be offered, sold or otherwise made available to, any retail investor in the European Economic Area (the "EEA"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); (ii) a customer within the meaning of Directive 2016/97/EU (as amended, the "Insurance Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129 (as amended or superseded, the "Prospectus Regulation"). No key information document required by Regulation (EU) 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Securities or otherwise making them available to retail investors in the EEA has been prepared and, therefore, offering or selling the Securities or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

Prohibition of sales to retail investors in the United Kingdom. The Securities are not intended to be offered, sold or otherwise made available to, and should not be offered, sold or otherwise made available to, any retail investor in the United Kingdom (the "UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended, the "EUWA"); (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (as amended, the "FSMA") and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA (as amended or superseded, the "UK Prospectus Regulation"). Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (as amended, the "UK PRIIPs Regulation") for offering or selling the Securities or otherwise making them available to retail investors in the UK has been prepared and, therefore, offering or selling the Securities or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.

IN MEMBER STATES OF THE EEA, THIS ANNOUNCEMENT IS DIRECTED ONLY AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF THE PROSPECTUS REGULATION IN SUCH MEMBER STATE AND SUCH OTHER PERSONS AS THIS ANNOUNCEMENT MAY BE ADDRESSED ON LEGAL GROUNDS, AND NO PERSON THAT IS NOT A RELEVANT PERSON OR QUALIFIED INVESTOR MAY ACT OR RELY ON THIS ANNOUNCEMENT OR ANY OF ITS CONTENTS. IN THE UNITED KINGDOM, THIS ANNOUNCEMENT IS DIRECTED ONLY AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF THE UK PROSPECTUS REGULATION AND SUCH OTHER PERSONS AS THIS ANNOUNCEMENT MAY BE ADDRESSED ON LEGAL GROUNDS, AND NO PERSON THAT IS NOT A RELEVANT PERSON OR QUALIFIED INVESTOR MAY ACT OR RELY ON THIS ANNOUNCEMENT OR ANY OF ITS CONTENTS.

Forward-looking statements
This announcement contains "forward-looking statements" within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, regarding assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as "forward-looking statements". In some cases, predictive, future-tense or forward-looking words such as "aim", "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "guidance", "intend", "may", "plan", "potential", "predict", "projected", "should" or "will" or the negative of such terms or other comparable terminology are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. In addition, Burford and its representatives may from time to time make other oral or written statements that are forward-looking, including in its periodic reports that Burford files with, or furnishes to, the US Securities and Exchange Commission, other information made available to Burford's security holders and other written materials. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. Burford cautions you that forward-looking statements are not guarantees of future performance and are based on numerous assumptions, expectations, projections, intentions and beliefs and that Burford's actual results of operations, including its financial position and liquidity, and the development of the industry in which it operates, may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements contained in this announcement. Significant factors that may cause actual results to differ from those Burford expects include, among others, those discussed under "Risk Factors" in Burford's annual report on Form 20-F for the year ended December 31, 2022 filed with the US Securities and Exchange Commission on May 16, 2023 and other reports or documents that Burford files with, or furnishes to, the US Securities and Exchange Commission from time to time. In addition, even if Burford's results of operations, including its financial position and liquidity, and the development of the industry in which it operates are consistent with the forward-looking statements contained in this announcement, those results of operations or developments may not be indicative of results of operations or developments in subsequent periods.

Except as required by law, Burford undertakes no obligation to update or revise the forward-looking statements contained in this announcement, whether as a result of new information, future events or otherwise.

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SOURCE Burford Capital

FAQ

What is the offering size of the Additional Notes?

The offering size of the Additional Notes is $275.0 million.

When is the offering expected to close?

The offering is expected to close on January 30, 2024.

What will the net proceeds from the offering be used for?

The net proceeds from the offering will be used for general corporate purposes.

Are the Securities registered under the US Securities Act of 1933?

The Securities have not been, and will not be, registered under the US Securities Act of 1933.

Who can the Securities be offered to?

The Securities will be offered only to Qualified Institutional Buyers or non-US persons outside the United States.