Scottish Mortgage Inv Trust (SMT)

Sector:

Investment Firms

Index:

FTSE 100

902.80p
   
  • Change Today:
      1.80p
  • 52 Week High: 908.40
  • 52 Week Low: 637.60
  • Currency: UK Pounds
  • Shares Issued: 1,337.86m
  • Volume: 546,250
  • Market Cap: £12,078m
  • RiskGrade: 143

Scottish Mortgage reduces interest costs through long-term borrowing

By Josh White

Date: Friday 07 Apr 2017

LONDON (ShareCast) - (ShareCast News) - Scottish Mortgage Investment Trust announced on Friday that it has agreed to raise a total of £125m in long term, fixed rate, senior, unsecured private placement notes, denominated in sterling.
The FTSE 100 firm said the purpose of the transaction was to obtain long-dated unsecured sterling-denominated financing at what the company believed to be attractive pricing levels, with the intention of enhancing shareholder returns over the long term.

It said the private placement agreement provided for total borrowings of £105m, with a funding date of 6 April 2017, through the issuance of three notes - one 25 year note for £45m with a fixed coupon of 3.05%, one 27 year note for £30m with a fixed coupon of 3.30% and a 30 year note for £30m with a fixed coupon of 3.12%.

All coupons would be payable semi annually, and the funds raised will be used to retire, in part, an existing bank debt facility of $165m which was to due to mature in early April.

Additionally, Scottish Mortgage said it agreed to raise an additional sum of £20m to refinance the its existing £20m debenture, at the time that matured in 2020.

The note would have a fixed coupon of 3.65%, payable semi annually, and a tenor of 24 years.

Scottish Mortgage said the private placement agreement formed part of the existing gearing facilities for the company, adding there would be no change to the overall level of indebtedness of the firm as a result of the borrowings.

Santander acted as sole placement agent for the transaction.

"Our current borrowing facilities comprise principally some $450m in floating rate loans and three fixed rate, long term debentures totalling £145m," said chairman John Scott.

"The latter were arranged many years ago and pay interest rates which reflect the circumstances of those times - which are considerably higher than the rates available today.

"We are unable to pre-pay these debentures without significant penalty, but I am pleased to say that we have taken advantage of current market conditions which allow us to access long term fixed rate sterling at rates of just over 3% per annum."

Scott said Scottish Mortgage would use that to reduce its exposure to possible future increases in interest rates, as well as starting the programme of replacing its existing fixed rate debentures, the first of which would mature in 2020, and whose successor facility was now in place.

"When this new £20m facility replaces its predecessor in 3 years' time, the interest rate on that £20m tranche will fall from 14% to 3.65%.

"In committing Scottish Mortgage to a borrowing programme which stretches to 2047, the board looked both at the interest costs, which average some 3.22%, and the company's long term investment record, which in the five years to 28 February has seen a compound increase in NAV per share of 19.2% per annum."

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

SMT Market Data

Currency UK Pounds
Share Price 902.80p
Change Today 1.80p
% Change 0.20 %
52 Week High 908.40
52 Week Low 637.60
Volume 546,250
Shares Issued 1,337.86m
Market Cap £12,078m
RiskGrade 143

SMT Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
6.47% above the market average6.47% above the market average6.47% above the market average6.47% above the market average6.47% above the market average
15.82% below the sector average15.82% below the sector average15.82% below the sector average15.82% below the sector average15.82% below the sector average
Price Trend
84.37% above the market average84.37% above the market average84.37% above the market average84.37% above the market average84.37% above the market average
95.77% above the sector average95.77% above the sector average95.77% above the sector average95.77% above the sector average95.77% above the sector average
Income
88.18% below the market average88.18% below the market average88.18% below the market average88.18% below the market average88.18% below the market average
91.03% below the sector average91.03% below the sector average91.03% below the sector average91.03% below the sector average91.03% below the sector average
Growth
40.81% above the market average40.81% above the market average40.81% above the market average40.81% above the market average40.81% above the market average
35.50% above the sector average35.50% above the sector average35.50% above the sector average35.50% above the sector average35.50% above the sector average

SMT Dividends

  Latest Previous
  Final Interim
Ex-Div 13-Jun-24 23-Nov-23
Paid 11-Jul-24 15-Dec-23
Amount 2.64p 1.60p

Trades for 28-May-2024

Time Volume / Share Price
10:24 21 @ 902.80p
10:24 367 @ 902.80p
10:24 150 @ 903.11p
10:24 1 @ 903.40p
10:24 43 @ 902.85p

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