Macquarie share price slips amid move to fortify war chest by $400 million

Macquarie is raising funds. Here’s how…

| More on:
A man thinks very carefully about his money and investments.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Macquarie is strengthening its war chest with a $400 million raising
  • The investment bank is raising the funds through a capital notes offering
  • One leading broker sees a lot of value in the Macquarie share price

The Macquarie Group Ltd (ASX: MQG) share price has edged into the red this morning.

At the time of writing, the investment bank’s shares are down almost 0.5% to $165.63.

What’s happening with the Macquarie share price today?

Today’s pullback in the Macquarie share price appears to be largely due to weakness in the banking sector this morning.

All the big four banks are trading lower currently following a soft night for financials on Wall Street.

Capital notes offer

Also potentially weighing on the Macquarie share price today is news that the investment bank is raising funds.

According to an announcement, the company intends to raise $400 million, with the ability to raise more or less, through the offer of capital notes.

These are being issued at $100 per note and will pay distributions on a quarterly basis in arrears commencing on 12 September. The distribution rate is based on a reference rate plus the margin, adjusted for franking. The margin will be determined under a bookbuild but is expected to be between 3.7% and 3.9%.

Management advised that the offer is consistent with Macquarie’s strategy to actively manage its capital mix and maintain diverse sources of funding. The net proceeds of the offer will be used for general corporate purposes.

Are Macquarie’s shares in the buy zone?

Analysts at Morgans see a lot of value in the Macquarie share price at the current level.

The broker currently has an add rating and $215.00 price target on the company’s shares. This implies potential upside of almost 30% for investors over the next 12 months.

It commented:

We continue to like MQG’s exposure to long-term structural growth areas such as infrastructure and renewables. The company also stands to benefit from recent market volatility through its trading businesses, while the company continues to gain market share in Australian mortgages.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

A mature age woman with a groovy short haircut and glasses, sits at her computer, pen in hand thinking about information she is seeing on the screen.
Financial Shares

Can the Macquarie share price get back over $200 this year?

Macquarie shares have been going up but is $200 on the cards in 2022?

Read more »

A person sitting at a desk smiling and looking at a computer.
Earnings Results

Money3 share price rockets after ‘record breaking’ results

The loan provider also increased its dividend to celebrate its buoyant numbers across all key metrics.

Read more »

A male executive worker wearing glasses and a blue collared shirt looks at his laptop screen with a concerned look on his face and his hand to his forehead as he watches his screen.
Earnings Results

Challenger share price tumbles 10% on FY22 profit woes

Challenger has commenced a strategic review of the Bank, acquired in December 2020 and not living up to expectations in…

Read more »

Disappointed woman with her head on her hand.
Financial Shares

Why is the AMP share price having such a lousy start to the week?

What's happened to AMP shares today?

Read more »

Businessman in suit and holding a briefcase jumps into the sky celebrating the rising share price.
Earnings Results

Bailador Technology share price leaps 5% as FY22 profits soar

Bailador is a specialist investor in the information technology and media sectors.

Read more »

a bearded man sits at his desk with hands behind his head and feet on his desk smiling widely while looking at his computer screen which has market data on it, indicating a please share price rise.
Earnings Results

Argo share price lifts on record 2022 financial year profit results

The strong profits were driven by record dividend payouts from some of the LIC’s holdings.

Read more »

Two businesspeople in suits run, one chasing the other.
Financial Shares

Is this why the NIB share price is lagging Medibank on Friday?

Both health insurers are in the red today, but one is faring worse.

Read more »

A man and a woman sit in front of a laptop looking fascinated and captivated.
Financial Shares

Looking to buy AMP shares? Read this first

We check out what a broker has to say about the financial services company.

Read more »