Centrus arranges a €60m Private Placement for Impax Environmental Markets plc

Transaction Overview

Launched in 2002, Impax Environmental Markets plc (“IEM”) is the UK’s largest environmental investment trust.

IEM’s objective is to deliver long term capital growth by investing in companies offering solutions to environmental challenges, particularly clean energy, water treatment and pollution control, waste technology, natural resource management and sustainable food. 

IEM has announced the successful issue of €60m privately placed notes (the “Notes”), providing the Company with an element of long-term structural debt as part of its investment strategy.

Centrus Solution

IEM has agreed to issue the Notes to funds managed by Pricoa Private Capital (part of PGIM, Inc) in three tranches as follows:

  • €20m maturing on 1 September 2030 with a floating coupon of Euribor + 1.35%;
  • €30m maturing on 1 September 2033 with a fixed coupon of 4.48%; and
  • €10m maturing on 1 September 2035 with a fixed coupon of 4.63%.

Centrus acted as arranger of the issue of the Notes, advising on the structure of the transaction, drafting an investor presentation and arranging meetings with a selected group of institutional investors.

The funding date is expected to be 1 September 2023 and the proceeds of the financing will be used to repay outstanding bank debt of $32.2m and £25m.


The three unusual features of  IEM’s private placement are as follows:

Currency –  IEM raised Euros rather than sterling or US dollars. IEM’s assets are denominated predominantly in US$ but also with a substantial holding in Euros. Looking at £,$ and € interest levels are significantly lower in € and the decision was taken to borrow in the lowest coupon currency at the time with a substantial holding of Euro denominated investments.

Maturity – The board was reluctant to lock into current coupon levels for a long period. Consequently, the financing was structured with three tranches of 7, 10 and 12 years providing some certainty of financing but deliberately spreading the refinancing risk.

Fixed/Floating – The 7 year tranche was swapped by Pricoa into floating rate. The reason for this was that IEM’s board took the view that interest rates are likely to fall within the next 2 years, so the company will benefit as and when this occurs. In addition, the credit spread IEM has achieved is very competitive compared with bank financing.

“Using structural debt with the aim of enhancing returns for shareholders is a key advantage of the investment trust structure. This financing provides attractive long-term debt capital to be deployed for the benefit of shareholders for many years to come and comes at a time when the Board and the Manager believe that portfolio valuation makes gearing desirable”.

Glen Suarez, Chair – IEM

“Against a backdrop of volatile conditions in both global equity and debt markets, we are delighted to have worked with IEM to conclude a successful institutional financing. 

One of the unusual features of this private placement was the 7 year floating rate tranche which was provided by the investor at a very competitive credit spread. Our expectation is that other investment trusts will be tempted to follow IEM’s lead, raising floating rate debt from the institutional market”

Robert St John – Centrus

For more information, please contact Robert St John

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