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Investment Trust Insider on long term debt


James Carthew: Witan paves way for debt-laden Merchants

One headline that caught my eye last week was Witan (WTAN) announcing it had borrowed £30 million at a rate of 2.74% fixed for 37 years. I think that might be a record, in terms of time to maturity, for the investment companies sector.

For most of my career I have not been a fan of long-term debt which has caused all sorts of problems for a number of investment trusts and companies over the years.

However, it seems we are at a crossroads: really expensive, long-term debt that was taken out in the late 1980s is maturing and many trusts may breathe a sigh of relief as a result.

At the same time, other stock exchange-listed funds are embracing the idea once again….

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