LF Capital Getting Closer to IPO with a Tweak to Its Structure
LF Capital Acquisition Corp., a SPAC focused on the Fintech sector, filed another amended S-1 this morning. Of note, the pro rata percentage held in trust jumped a percentage point from 101% to 102%. This means $10.20 per share is now held in the trust account in the event of redemption, conversion or liquidation.
To reach 102%, the Sponsors over-funded the trust by increasing the purchase of private placement warrants by $1,350,000. Originally, the purchase was 5,600,000 warrants at $1.00 and now 6,950,000 warrants (assuming no over-allotment is exercised).
The increase in amount held in trust is not surprising. SPAC institutional investors are going to want a little something extra now that BlackRock Funds has signed on as a Sponsor/Anchor Investor and in order to get them to hold a position for potentially 24 months with a business combination pretty much guaranteed, a little sweetener was required. A 2.0% return is a nice way to start.
Additional note: LF Capital could potentially price this week. Stay tuned for more details.