M&G Credit announces fundraise, first-half return misses benchmark
M&G Credit Income Investment Trust PLC on Friday reported a net asset value decline, and announced a placing and retail offer.
The London-based debt investment company's net asset value total return was plus 2.36% for the first six months of 2026, compared with plus 3.82% from its benchmark, the SONIA plus 4%. However, M&G Credit noted that it outperformed other indices, including the plus 0.96% return from the ICE BofA Sterling Corporate & Collateralised Index, and plus 1.69% from the ICE BofA 1-3 Year BBB Sterling Corporate & Collateralised Index.
The company's NAV per share was 91.47 pence as of June 30, down from 92.91p at December 31. Its stock was up 1.3% at 91.80p on Friday in London.
The firm also noted that it paid dividends of 1.73p and 1.75p per share for the first and second quarters.
"The investment manager continued to position the portfolio defensively as credit spreads remained close to historically tight levels...The first quarter was characterised by heightened volatility following the escalation of tensions involving Iran, an artificial intelligence-related sell off in software companies and adverse news about private credit in the US," said Chair David Simpson. "This resulted in wider credit spreads and weaker market sentiment. However, as concerns over immediate energy supply disruption eased and investors refocused on resilient corporate fundamentals, credit spreads retraced much of their earlier widening during the second quarter.
"In a tight credit spread environment, deploying capital in line with the company's long-term return target can be challenging. However, during the period, the Investment Manager was able to benefit from the macroeconomic backdrop, using its flexibility to invest across asset classes, to rotate meaningfully out of public credit and into private credit, realising capital gains and improving the portfolio yield."
Looking ahead, Simpson believes the credit markets outlook "remains finely balanced," noting: "The Middle East remains very unstable and energy markets are correspondingly volatile....The company remains well positioned for a range of market outcomes with a diversified portfolio, predominantly investment grade credit quality and access to M&G's extensive public and private credit capabilities."
Also on Friday, M&G Credit announced its decision to conduct a placing and retail offer.
It did not disclose the anticipated total, but said it will issue any new shares at a price equal to a 1.5% premium to the last published cum-income net asset value per ordinary share prior to the closing of the fundraising, currently scheduled for October 20.
M&G Credit expects to announce the issue price on October 16. It said it will invest the net proceeds in accordance with its policy.
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