Scottish Mortgage Inv Trust (SMT)

Sector:

Investment Firms

Index:

FTSE 100

902.00p
   
  • Change Today:
      1.50p
  • 52 Week High: 959.00
  • 52 Week Low: 468.40
  • Currency: UK Pounds
  • Shares Issued: 1,475.03m
  • Volume: 1,250,491
  • Market Cap: £13,305m
  • RiskGrade: 179

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 902.00p
Change Today 1.50p
% Change 0.17 %
52 Week High 959.00
52 Week Low 468.40
Volume 1,250,491
Shares Issued 1,475.03m
Market Cap £13,305m
RiskGrade 179

SMT Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
19.04% below the market average19.04% below the market average19.04% below the market average19.04% below the market average19.04% below the market average
62.83% below the sector average62.83% below the sector average62.83% below the sector average62.83% below the sector average62.83% below the sector average
Price Trend
90.48% above the market average90.48% above the market average90.48% above the market average90.48% above the market average90.48% above the market average
98.36% above the sector average98.36% above the sector average98.36% above the sector average98.36% above the sector average98.36% above the sector average
Income
89.94% below the market average89.94% below the market average89.94% below the market average89.94% below the market average89.94% below the market average
96.93% below the sector average96.93% below the sector average96.93% below the sector average96.93% below the sector average96.93% below the sector average
Growth
12.98% below the market average12.98% below the market average12.98% below the market average12.98% below the market average12.98% below the market average
10.98% below the sector average10.98% below the sector average10.98% below the sector average10.98% below the sector average10.98% below the sector average

What The Brokers Say

Strong Buy 1
Buy 0
Neutral 0
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Strong Sell 0
Total 1
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SMT Dividends

  Latest Previous
  Final Interim
Ex-Div 04-Jun-20 21-Nov-19
Paid 01-Jul-20 06-Dec-19
Amount 1.86p 1.39p

Trades for 13-Aug-2020

Time Volume / Share Price
15:33 60 @ 901.61p
15:33 993 @ 902.00p
15:33 701 @ 902.00p
15:33 287 @ 902.00p
15:32 500 @ 901.61p

SMT Key Personnel

Chair Fiona McBain

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