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


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.

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