Dunedin Income Growth Investment Trust has agreed to issue £30m of 30 year Senior Secured Fixed Rate notes at a coupon of 3.99%, subject to final documentation being entered into. The purpose of this transaction is to obtain fixed rate long dated Sterling denominated financing at a price that the Company considers attractive. The Company continues to believe that sensible use of modest financial gearing, whilst amplifying market movements in the short term, will enhance returns of both capital and income to shareholders over the longer term.
The funding date is expected to be 8 December 2015 with interest payable semi-annually in arrears. The principal repayment date will be 8 December 2045. The proceeds will be used for general corporate purposes, including a prefinancing of the 7(7/8) % Debenture Stock 2019, nominal value £28.6m due in 2019.
There has been no change to the Company’s policy on gearing. The Company is not seeking to materially increase equity gearing as a result of the issue, and will instead, until the repayment of the existing debenture, invest a similar amount to the value of the 2019 debenture into a portfolio of fixed interest securities with a similar duration.
The notes will rank alongside in right of payment with all current and future senior secured indebtedness of the Company.
DIG : Dunedin Income Growth takes on 30 year debt