British Empire has announced that it is taking on 20 year debt. The company says the Board (headed up by Strone Macpherson – pictured) have agreed to issue 20 year unsecured private placement notes in two tranches. The first tranche is £30m and the second is €30m (equal to £22.6m at the closing exchange rate on 14 January 2016). The blended annualised cost of the new debt is 3.78%. The Notes are due to be repaid on 15 January 2036. The interest payment dates will be 15 January and 15 July. The Notes are unsecured.
The announcement points out that there has been no change in the Company’s formal policy on gearing, as set out on page 34 of its 2015 Annual Report. To save you looking it up we reproduce this below:
“The Company may gear its assets through borrowings which may vary substantially over time according to market conditions but which will not exceed twice the nominal capital and reserves of the Company.” They then go on to say.. “The Company’s debt-to-equity ratio as at 30 September 2015 was 2.2%. To allow for flexibility in the future, the limits set under AIFMD are higher than this, and state that it is expected that no more than 50% of NAV would be employed as gearing under the Gross Method and no more than 30% of NAV under the Commitment Method.”
Total fixed rate borrowing, including the Notes, has increased from £15m to £67.6m following completion of this transaction.
BTEM : British Empire takes on 20 year debt