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Tetragon Financial Group
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== Gearing: Fully invested and ungeared<ref name=":2" /> == Tetragon does not use structural gearing and uses external debt financing only to temporarily bridge the gap between new investments and realisations to take advantage of arising investment opportunities. Tetragon had a minor net debt position as at end-April 2022 of US$57.1m (2.1% of its NAV) and has been fully invested since late 2019. This compares to a significant cash reserve kept historically to maintain flexibility for opportunistic investments (2015–18 average net cash at 18% at year-end). Tetragon has a US$250m revolving credit facility in place, which was fully drawn as at end-March 2022. The current allocation should limit the portfolio’s cash drag, while available cash leaves Tetragon with ample dry powder to pursue new opportunities; Edison Investment Research calculates that Tetragon had c US$193m (or 7% of its NAV) available to invest as at end-April 2022. The facility has an interest rate of three-month US Libor +3.25%, and Tetragon is also obliged to pay a servicing fee of 0.015% of the total amount and non-usage fee of 0.5% on the undrawn amount. In 2021 the total costs of the credit facility totalled US$5.1m (FY20: US$6.2m), which translates to 0.2% of Tetragon’s opening NAV. During the year, Tetragon repaid US$25m of the facility on a net basis.
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