LONDON (ShareCast) - (Sharecast News) - Retirement income specialist Just Group has successfully completed its capital raise through a mix of new shares and debt.
The company raised £375m in gross proceeds through the sale of £300m-worth of perpetual bonds rated BBB- and offering annual interest of 9.375%, alongside £75m-worth of new equity at a price of 80p per share.

Commenting on Monday's capital raise, group chief executive, Rodney Cook, said the mix of new shares and debt had been chosen so as to optimise the company's capital mix, while emphasising that management was aware that the new capital "had come at a cost".

Cook also stressed the need to manage the firm's capital position "carefully", while calling attention to the plans that had already been put in place to deliver capital self-sufficiency from 2022, by focusing on profitability - through disciplined pricing - instead of sales growth.

Just Group first announced its plans to raise fresh capital (including "at least" £300m via a sale of restricted Tier 1 debt) on 14 March, alongside the release of its full-year numbers and on the back of the results of the Prudential Regulation Authority's consultation into equity release mortgages, last October.

In October, the Bank of England's PRA announced fresh measures meant to ensure that lenders in the fast-growing market for equity release products were adequately capitalised, especially when it came to calculating the future value of homes.

Under current regulations, the new perpetual bonds could be included in the calculation of financial firm's Tier 1 regulatory capital buffers.

To take note of as well, the firm said it retained "capital flexibility", for example, via its ability to issue so-called Tier 2 debt.

As of 0818 GMT, shares of Just Group were trading down by 1.62% to 69.65p, establishing a fresh 52-week low in the process. The company's share price had been especially weak since mid-2018, after management decided to defer its interim payout due to the uncertainty surrounding the outcome of the PRA's consultation paper.

At the time of its full-year results, management's expectation was for dividend payouts to be resumed in 2019 at a rebased level.

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