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July 11, 2022
Welcome to the SPAC Research weekly newsletter.

Market Update
SPAC Issuance is at a standstill, as we've covered at length. We're still seeing a handful of new S-1's each month, but the bulge bracket is essentially absent from IPOs and new deals. And there were only three SPAC IPOs in June that collectively raised less than $400mm.
We're still waiting to receive any sort of regulatory clarity from the SEC. But while we do so, market sentiment has been so challenging that regular-way IPO activity has followed a similar trajectory as SPAC IPOs, as you can see below.
Source: Renaissance Capital
Meanwhile, SPAC yields have continued to rise, moving from 4% to nearly 5% over the past month.
During most of the SPAC bull run, interest rates were relatively stable. So SPAC yields were a fairly isolated barometer of sentiment.

But as short term Treasury rates have moved up this year, SPAC yields have adjusted to reflect rate expectations as well as market sentiment. We plotted both data sets below, along with the difference between them.
The yellow line strips out the impact of rate expectations in the median SPAC yield, and that's an indicator that's more reflective of the absolute interest in SPAC shares at a given point in time.

Interestingly, you can't really see any impact from the SEC's proposed rule changes in the yellow line above, which demonstrates that weak sentiment broadly continues to provide a huge amount of influence on SPAC market conditions.

On the other hand, you can see from the SPAC Research Warrant Index below that pre-deal warrant prices continue to fall, demonstrating the market's pessimism for this giant class of SPACs' ability to close deals under current conditions.
Returning to the estimated SPAC yield curve at present, we can see the pending maturity wall in the clustering of dots along the x-axis below.
Only one current pre-deal SPAC (Fast Acquisition Corp; NYSE: FST) is trading at a premium to trust, and that one is likely doing so out of investors' expectations that they might somehow participate in that SPAC's receipt of an up to $33mm termination fee from its former acquisition target.

We'll close with a look at deal announcements, which are languishing in generally the same place as the rest of the market.
There were 19 deals announced in May and another 10 in June. But common stock PIPE financing remains near zero. We all know that common stock PIPEs are the best way to support a deal but the current market environment has made them exceedingly challenging.

We'll be back next week with an updated look at the proportion of financing types being announced with recent SPAC deals, as well as a handful of other market internals.

News From the Past Week

Deal News

  • HPX Corp. (HPX) announced a deal to acquire Ambipar Response, an environmental solutions service provider in Brazil with a global presence. The deal reflects an enterprise value of $581mm and includes $162mm in PIPE commitments from investors including Ambipar. The transaction is expected to close in 2H 2022.

  • Kingswood Global Holdings Inc. (KWAC) announced a deal to acquire Wentworth Management, a holding company that acquires and manages businesses in the wealth management industry. The deal reflects an enterprise value of $208mm and is expected to close in Q4 2022.

  • Health Sciences Acquisitions Corporation 2 (HSAQ) announced a deal to acquire Orchestra BioMed, a biomedical company accelerating high-impact technologies to patients. The deal reflects an enterprise value of $158mm and includes $20mm in FPAs from Medtronic and RTW (an affiliate of HSAQ’s sponsor) as well as a $50mm backstop from RTW. The transaction is expected to close in Q4 2022.

Liquidations


New S-1's
There were no new S-1's this week.

IPOs
There were no SPAC IPOs this week.

Registrations Withdrawn
Name Ticker Size ($mm) Underwriter Trust Funding Coverage
Transformational CPG Acq TCPG 300 JPM 100.0% 1/3
Altamont Pharma Acq ALTP 100 Chardan 100.0% W

Charter Extensions

  • VCKA extended its charter through 8/11/2022 with a single $0.0333 contribution to trust and 30% of public shares remaining.

  • ETAC extended its charter through 11/4/2022 with a $0.035 monthly contribution to trust and 55% of public shares remaining.

  • MBTC extended its charter through 10/5/2022 with a single $0.10 contribution to trust.

  • ACBA extended its charter through 10/8/2022 with a single $0.099 contribution to trust.

  • INKA extended its charter through 1/1/2023 with a $0.033 monthly contribution to trust and 60% of public shares remaining.

Upcoming Meetings and Deadlines

  • 7/12/2022 LJAQ Liquidation deadline (pending optional $0.10 deposit extension)
  • 7/12/2022 GSAQ Liquidation deadline (pending optional $0.10 deposit extension)
  • 7/12/2022 ACEV Charter extension meeting (liquidation date 7/13/2022)
  • 7/12//2022 FOXW Charter extension meeting (liquidation date 7/22/2022)
  • 7/13/2022 BRLI Charter extension meeting (liquidation date 7/23/2022)
  • 7/13/2022 GLSPT Charter extension meeting (liquidation date 7/13/2022)
  • 7/13/2022 GLSPT Gorilla Technology approval meeting (outside date 7/13/2022)
  • 7/14//2022 CLAY Charter extension meeting (liquidation date 7/22/2022)
  • 7/14//2022 HPX Charter extension meeting (liquidation date 7/20/2022)
  • 7/15/2022 BRPM FaZe Clan approval meeting
  • 7/15/2022 ITHX Mondee approval meeting
  • 7/15/2022 ACTD OPAL Fuels approval meeting
  • 7/18/2022 CLAQ Charter extension meeting (liquidation deadline 7/19/2022)
  • 7/19/2022 PRPB Getty Images approval meeting (outside date 7/24/2022)
  • 7/20/2022 OCAX Liquidation deadline (pending optional $0.05 deposit extension)
  • 7/21/2022 TRON Liquidation deadline
  • 7/22/2022 CLOE Liquidation deadline (pending optional $0.10 deposit extension)
Disclosures: Site administrators may maintain positions in various SPAC securities and may trade in or out of those securities at any time without notice. Information from spacresearch.com is provided for informational purposes only and should not be relied upon as the basis for any investment decision. Nothing on spacresearch.com is a recommendation or solicitation to buy or sell any investment.
Copyright © 2022 SPAC Research, All rights reserved. SPAC Research is the source of all data unless otherwise noted.

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