Private credit is creating new ways for investors to access lending opportunities beyond traditional banking. Discover how Credit Connect Group’s proposed A$300 million Debenture Issuance Programme is structured, how it connects investor capital with Australian property-backed lending, and what prospective investors should consider.
Understanding the growth of private credit
Private credit has become an increasingly prominent part of the global finance landscape. As borrowers seek alternatives to traditional bank lending, non-bank lenders are playing an important role in providing capital for commercial, business and property-related financing.
Private credit can offer borrowers greater flexibility in structuring finance, particularly where transactions require tailored terms or time-sensitive funding.
For investors, the sector provides an alternative way to gain exposure to lending activities. However, private credit investments vary considerably in their structure, underlying assets, liquidity and risk profile. Understanding how an investment works is an important first step in evaluating whether it may be appropriate for an investor’s circumstances.
Introducing Credit Connect Group
Credit Connect Group (CCG) is an Australian mortgage management and private credit business founded in 2006. The Group specialises in property-backed lending and has originated more than A$1 billion in loans.
CCG brings together loan origination, structuring, credit assessment, loan management and investor servicing. Its approach centres on assessing individual lending opportunities and managing the lending process from origination through to repayment.
Through its private credit activities, CCG works with borrowers seeking property finance and investors looking to explore opportunities within the private credit market.
The A$300 million Debenture Issuance Programme
CCG’s proposed A$300 million Debenture Issuance Programme is designed to raise capital for investment in Credit Connect Funds, which provide short-to-medium-term loans secured by Australian real estate.
The programme uses a series-based structure intended to link each series of Notes to a designated loan pool. This enables investors to review information relating to the relevant lending opportunities before making an investment decision.
The structure involves several key components:
1. Investor capital
Eligible investors subscribe for Notes issued by a dedicated special purpose vehicle (SPV). The programme is principally directed towards offshore investors, with eligibility and participation subject to the applicable offer terms and selling restrictions.
2. The issuing entity
Credit Connect Debt Issuance Fund Pty Ltd is identified as the issuer. The Notes are unsecured obligations of the issuer, issued in separate series under the programme documentation.
3. Underlying lending activities
Capital raised is applied to the designated Credit Connect Fund and associated loan pool. The underlying funds provide loans secured by first mortgages over Australian property, subject to CCG’s credit assessment and approval processes.
4. Income payments and maturity
Under the proposed programme terms, the Notes target returns of 8–9% per annum, payable monthly, with capital scheduled for repayment at the relevant series maturity, subject to the terms of the Notes and the issuer’s ability to meet its obligations.
Each series has a stated 12-month maturity, although the programme documentation indicates that a series may be rolled over or extended.
How does property security fit into the structure?
Australian property is central to the underlying lending strategy. The Credit Connect Funds provide loans secured by first mortgages over property, with the programme specifying a maximum loan-to-value ratio of 70% at the series level.
Loan-to-value ratio (LVR) compares the amount of a loan with the value of the property securing it. It is one of several factors that can inform an assessment of lending risk.
Property security is an important feature of the underlying loans, but it does not eliminate risk. Property values can change, borrowers may default, and recovering funds through enforcement can take time and incur costs.
It is also important to distinguish between the underlying loans and the Notes themselves. The Notes are unsecured obligations of the issuer. Although the designated loan pools are backed by property mortgages, a Noteholder does not necessarily hold a direct mortgage over those properties. Investors should review the programme documents to understand the legal structure, rights and risks that apply to their particular series.
Key programme features
The discussion paper outlines the following indicative programme features:
- Programme size: Up to A$300 million.
- Issuer: Credit Connect Debt Issuance Fund Pty Ltd.
- Investment instrument: Unsecured Notes issued in separate series.
- Minimum investment: A$1 million per investor.
- Stated maturity: 12 months per series, subject to the possibility of rollover or extension.
- Underlying lending: Short-to-medium-term loans secured by first mortgages over Australian property.
- Maximum LVR: 70% at the series level.
- Target returns: 8–9% per annum, with monthly payments proposed under the programme terms.
- Loan information: Supplementary Information Memoranda (SIMs) are intended to provide details of individual lending opportunities.
These features are drawn from the programme discussion paper. The final terms, eligibility requirements and conditions applicable to any particular series should be confirmed in the relevant offer documentation.
What should prospective investors consider?
As with any investment, prospective investors should understand both the intended benefits and the risks before committing capital.
Important considerations include:
The issuer’s credit risk. The Notes are unsecured, meaning investors are exposed to the issuer’s ability to meet its obligations under the Notes.
Underlying loan performance. The ability of the underlying funds to generate income depends on borrower repayments and the performance of the relevant loans.
Property and valuation risk. Property values can fluctuate, and mortgage security does not guarantee full or timely recovery of outstanding debt.
Liquidity and maturity. Investors should understand the transferability of the Notes, any restrictions on early exit, and the circumstances in which a maturity may be extended or rolled over.
Investment eligibility and documentation. The programme is subject to eligibility requirements and selling restrictions. Investors should review the applicable Information Memorandum, the relevant SIM and other offer documents, and obtain independent professional advice where appropriate.
A note on taxation for offshore investors
The programme discussion paper describes an intended reliance on section 128F of the Income Tax Assessment Act 1936 in relation to Australian interest withholding tax.
Whether the relevant exemption applies depends on the legal structure, offer arrangements and satisfaction of the statutory requirements. It should not be assumed that every investor or series will qualify. Offshore investors should seek advice on their individual tax position and confirm the treatment applicable to the particular Notes before investing.
Explore private credit with CCG
CCG’s proposed Debenture Issuance Programme is designed to connect eligible investors with a series-based private credit structure linked to Australian property-backed lending.
For investors considering this type of investment, understanding the issuer, the underlying lending strategy, the terms of the Notes and the associated risks is essential.
To learn more about CCG and the programme, contact the CCG team to request further information and the relevant offer documentation.
Contact CCG
1300 795 507
www.ccg.com.au
Important information: This article is for general information only and does not constitute financial product advice, an offer to invest or a recommendation to acquire any financial product. The programme and its terms are subject to the applicable documentation, eligibility requirements and selling restrictions. Target returns are not guaranteed, and investors may lose some or all of their capital. Past performance is not a reliable indicator of future performance. Prospective investors should read the relevant offer documents and obtain independent financial, legal and taxation advice before making an investment decision.
