BURFORD CAPITAL ANNOUNCES PRIVATE OFFERING OF SENIOR NOTES

Rhea-AI Summary

Burford Capital Limited announces a planned private offering of $200.0 million aggregate principal amount of additional 9.250% senior notes due 2031 by its subsidiary, Burford Capital Global Finance LLC. The offering is intended for general corporate purposes and will be guaranteed by Burford Capital and its subsidiaries. The Securities will be offered to Qualified Institutional Buyers and non-US persons outside the United States.

Insights

Financial Analyst

The announcement by Burford Capital Limited regarding its subsidiary's planned private offering of $200.0 million in additional senior notes is a strategic move aimed at bolstering the company's financial position. The decision to issue debt can be influenced by various factors, including current interest rates, the company's leverage ratio and the need for liquidity or financing for upcoming projects or investments.

The 9.250% interest rate on the senior notes is a critical figure for investors to consider. It reflects the cost of debt for Burford and must be weighed against the potential returns on the use of these funds. If the interest rate is above the average for similar debt instruments in the market, it could indicate a higher perceived risk associated with the company or potentially higher returns on their investments. Investors will also scrutinize the terms of the guarantee by Burford Capital and its subsidiaries, as these provide insight into the creditworthiness of the issuer.

The use of proceeds for general corporate purposes is a broad statement that lacks specificity. Investors typically prefer detailed information on how companies plan to allocate raised funds, as it can affect the company's future revenue streams and profitability. If the funds are used effectively, it could lead to growth and expansion, positively influencing the company's stock value in the long term.

Legal Expert

The Securities' exemption from registration under the US Securities Act of 1933 and their offering solely to 'Qualified Institutional Buyers' and non-US persons is a legal maneuver that impacts the potential investor base and the regulatory landscape the company must navigate. This exemption allows Burford to streamline the offering process and reduce the regulatory burden associated with public offerings.

However, by limiting the pool of investors to 'Qualified Institutional Buyers' and 'Qualified Purchasers', Burford is accessing a more sophisticated investor base that may have different expectations and demands compared to retail investors. These investors typically require a higher due diligence standard, which can influence the company's transparency and governance practices.

Furthermore, the legal structure of the offering, including the senior unsecured guarantee by Burford Capital and its subsidiaries, is a key consideration. It indicates the level of risk the guarantors are willing to assume and the confidence they have in the Issuer's ability to meet its debt obligations. This could have implications for the company's credit rating and, consequently, its future borrowing costs.

Market Research Analyst

The issuance of additional senior notes by Burford Capital's subsidiary must be contextualized within the broader market conditions. The choice to raise capital through debt rather than equity can be indicative of the company's strategy to avoid shareholder dilution or to take advantage of favorable debt markets. The market's reception to this offering will provide insights into investor confidence in the legal finance and asset management sector, as well as Burford's market position.

Comparing the offered interest rate against the current market rates for similar debt instruments is essential. It can signal investor confidence in the legal finance industry and Burford's business model. A higher interest rate could suggest a premium for perceived risks, while a rate comparable to or lower than the industry average might indicate a strong investor appetite for Burford's securities.

The timing of this offering is also significant. If it coincides with a period of low-interest rates, it may suggest an opportunistic move by Burford to lock in lower borrowing costs. Conversely, if market rates are rising, the offering might be interpreted as a preemptive measure to secure funding before further rate hikes.

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 planned private offering of $200.0 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"), subject to market and other conditions. 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.  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 Burford Capital Limited's planned private offering amount?

Burford Capital Limited plans to offer $200.0 million aggregate principal amount of additional 9.250% senior notes due 2031.

Who will guarantee the offering of the Securities?

The offering will be guaranteed by Burford Capital as well as Burford Capital Finance LLC and Burford Capital PLC, all subsidiaries of Burford Capital.

Who are the Securities offered to?

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

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

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