Scottish Mortgage has announced that it has agreed to raise a total of £125 million in long term, fixed rate, senior, unsecured private placement notes, denominated in sterling. The funds raised will be used to retire, in part, an existing bank debt facility of US$165 million which is to due to mature in early April 2017. Scottish Mortgage says that the purpose of this transaction is to obtain long dated unsecured sterling denominated financing at what it believes to be attractive pricing levels, with the intention of enhancing shareholder returns over the long term.
The private placement agreement provides for total borrowings of £105 million, with a funding date of 6 April 2017, through the issuance of three notes: one 25 year note for £45 million with a fixed coupon of 3.05%, one 27 year note for £30 million with a fixed coupon of 3.30% and a 30 year note for £30 million with a fixed coupon of 3.12%. All coupons will be payable semi annually. Further, the Company has agreed to raise an additional sum of £20 million to refinance the company’s existing £20 million debenture, at the time this matures in 2020. This note will have a fixed coupon of 3.65%, payable semi annually, and a tenor of 24 years. Scottish Mortgage says that the private placement agreement forms part of the existing gearing facilities for the company. There will be no change to the overall level of indebtedness of the Company as a result of these borrowings.
Scottish Mortgage raises £125 million in private debt placement :SMT