In the last update, we unpacked how Agrarius is transforming the global agricultural sector and providing sustainable investment opportunities for investors. We also explored the achievements of the inaugural note program in 2022 up until the end of last year, with the returns of the instrument being highly competitive since inception, benchmarked against various asset-classes.
In this update we will look at issuances made during 2024, when coupon payments will be made to investors as well as the accessibility for retail investors.
2024 Issuances
Agrarius has raised R1bn to date through three Sukuk issuances:
- Listed A1 notes:
Inaugural issuance in October of 2022 of R500 million of listed notes. A tap issuance of an additional R100 million was completed in January 2024. The profit participation rate of the A1 note is 3-month JIBAR + 4.75%. - Listed B1 notes:
second issuance in January 2024 of R300 million of a separate tranche of listed notes. The profit participation rate of the B1 note is 6-month JIBAR + 4.25%. - Unlisted notes:
Issuance of R100 million in February 2024. The profit participation rate of the B1 note is 6-month JIBAR + 5.15%.
Coupon Payments
Agrarius has a unique project-based approach (as opposed to a balance sheet lend) that creates an opportunity for certainty around upcoming cash flow events that will service the debt Agrarius provides to underlying investments.
Periodic distributions are made with the first distribution on 30 September following the issuance, and thereafter semi- annually on 31 March and 30 September, respectively.
Accessibility
The Agrarius portfolio is suitable for investors who have limited alternative investment opportunities, especially in the regulated space, and are looking for a low-risk portfolio of diversified, asset-backed debt investments with a medium-term time horizon. It is currently available to retail investors via the following options.
- Listed Instrument: Agrarius Sukuk is listed on the JSE Debt Market, with the ticker of AGRIA1 and AGRIB1. What that means is that anyone with a stockbroking account can, with the assistance of a JSE approved stockbroker, invest in the Agrarius Sukuk. If you don’t have a stockbroker, you can contact us and we will facilitate that process.
- Endowment: We also have the Agrarius investment available through an Endowment Policy, which is a tax efficient way to structuring your investment, including estate planning benefits. With a minimum investment of R10 000, you can get access to the Endowment Policy. And we feel, this investment provides an alternative, especially in the regulated space, for investors looking for a low-risk portfolio of diversified, asset-backed debt investments with a medium-term time horizon.
- Investment Linked Living Annuity: This type of annuity allows you to continue growing your retirement savings in the market while drawing an income based on the growth of your investments and income needs. It also has the flexibility to choose a level of income that suits you at the start of the policy, provided that it falls between 2.5% and 17.5% of your investment, as stipulated by South African law. You can also choose how frequently you wish to receive this income (yearly, quarterly or monthly) as well as the investment portfolio. The key risk of this type of annuity is longevity risk. If a policyholder selects a drawdown rate that exceeds the investment performance generated, then the capital will be depleted quickly, creating a risk of the policyholder outliving their capital. With the predictable income streams from the Agrarius portfolio, this could be an ideal way to manage your drawdown rate within the Living Annuity, covering your monthly expenses.
You do have options of accessing Agrarius, all of which can be explained to you in more detail if required by our capable client services team at 27four, so please do reach out to us if you need any assistance.