Aberdeen Standard Asia Focus borrows long term – Aberdeen Standard Asia Focus has agreed terms to extend and secure the company’s long-term borrowings through the issuance of a £30m 15-year Senior Unsecured Loan Note at an annualised interest rate of 3.05%. The loan note will be unsecured, unlisted and denominated in sterling. It will rank pari passu with the company’s other unsecured and unsubordinated financial indebtedness.
The money will be used to repay, and cancel in full, the existing £20m Revolving Credit Facility (“RCF”), of which £11.2m is currently drawn. The remainder will be available for the manager to invest when it sees fit.
An additional £35m will also be available for drawdown by the company for a five-year period. The board’s current intention would be to only draw this down to repay any of the Convertible Unsecured Loan Stock, either at their redemption in 2025, or before. This will be kept under review. The minimum drawdown would be in tranches of £10m and the exact terms of such a borrowing would be agreed at the time of drawdown. The company will pay no fees on this facility, other than minimal legal fees.
The board believes that it is in the long-term interest of shareholders to take advantage of the current low interest rates to extend, and secure, the company’s debt profile beyond the CULS redemption date.
Once the initial drawdown is completed (expected to be 1 December 2020) and the RCF has been repaid, borrowings are expected to total approx. £66.7m, providing an extra approx. £18.7m of cash for investment.