Manage debt ratios & access cash during stress
Manage through the cycle
Top up working capital, keep dividend steady
Comfort to ratings agencies, creditors & banks
Fees and discounts can be significantly lower
Companies control all aspects of ATMs
Raise when prices or volumes are attractive
Raise above VWAP
Raise capital above the Value Weighted Average Price
Supplement capital raises, working capital or the DRP
ATMs allow the company to control if, when, at what minimum price and how much capital is raised.
ATMs provide flexibility that complements more traditional capital management strategies.
No investment bankers, no brokers, no road shows and no disclosure documents. Just cheaper capital.
ATM Key Features
ATMs are established for a particular term (e.g. 2 or 3 years) with a notional limit available over the term (e.g. $100 million). The company may "turn on" the ATM at any time during the term, though is under no obligation to do so.
Each time the company turns on the ATM it specifies the key parameters, including:
- Minimum or floor price - though the actual issue price may end up higher
- Maximum number of shares issued - ensuring minimal dilution
- Period over which the ATM is utilised - ensuring capital is raised at the optimal time
Importantly, the ASX company retains total control including whether or not to use the ATM.
Think of each ATM use as a "reverse buy back."
Important: ATMs are NOT equity lines and there is no overhang at any time