Scottish Mortgage Investment Trust (LON:SMT) today announced that it has raised a further c£188 million in long-term, fixed rate, senior, unsecured private placement notes, denominated in a mixture of Sterling and Euros. This transaction has provided the Company with further long-term financing at very attractive rates.
These new notes are part of Scottish Mortgage’s existing gearing facilities. The Board remains committed to the strategic use of borrowings for the Company, in the belief that gearing the portfolio in this way will enhance returns to shareholders over the long term. As Scottish Mortgage’s assets have grown in recent years, the Board has increased the absolute level of the borrowings in order to maintain the relative level of gearing of the portfolio. This is the third set of private placement notes issued by the Company.
The new private placement agreement provides for total additional borrowings of £188 million, through the issuance of three notes: one 20-year note for £150 million with a fixed coupon of 2.30%, one 25-year note for EUR 18 million with a fixed coupon of 1.65% and a 30-year note for EUR 27 million with a fixed coupon of 1.77%. All coupons will be payable semi annually. The funding date for all three tranches was the 15 January 2020.
Once again, Banco Santander S.A. London acted as the placement agent for the transaction.
Performance
Periodic Performance to 31 December 2019 (%)
| 1 Year | 3 Years | 5 Years | 10 Years | |
| Share Price | 24.8 | 84.1 | 143.1 | 509.4 |
| NAV | 26.8 | 85.3 | 145.1 | 419.3 |
| Index* | 22.3 | 34.4 | 81.2 | 198.2 |
Discrete Annual Performance (%)
| 01/01/15 – 31/12/15 | 01/01/16 – 31/12/16 | 01/01/17 – 31/12/17 | 01/01/18 – 31/12/18 | 01/01/19 – 31/12/19 | |
| Share Price | 13.3 | 16.5 | 41.1 | 4.6 | 24.8 |
| NAV | 14.8 | 15.3 | 40.6 | 4.0 | 26.8 |
| Index* | 4.0 | 29.6 | 13.8 | -3.4 | 22.3 |
Past performance is not a guide to future returns.
Performance source: Morningstar and underlying index provider, total return.
*FTSE All-World Index
Fiona McBain, Chairman of Scottish Mortgage, says:
“The Board views the capacity to issue modest amounts of debt as one of the principal advantages of Scottish Mortgage’s investment trust structure. I am delighted to say that that the Company continues to be able to raise private placement debt at highly attractive long-term rates. This is reflective of the enduring strength of Scottish Mortgage’s proposition and should enhance the long-term returns for our shareholders.”
