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(Alliance News) - Scottish Mortgage Investment Trust PLC on Thursday said it has raised roughly GBP188 million through new borrowings.
Scottish Mortgage is manager Baillie Gifford & Co Ltd's flagship investment trust. It was launched in 1909 and invests in stocks globally.
The company explained it issued a mixture of sterling and euro denominated long-term, fixed rate senior, unsecured private placement notes.
The private placements, which add GBP188 million in total additional borrowings, will see the company issue three sets of notes.
"This transaction has provided the company with further long-term financing at very attractive rates," the trust explained.
It will issue one 20-year note for GBP150 million with a fixed coupon of 2.30%. The euro denominated notes include one 25-year note for EUR18 million with a fixed coupon of 1.65% and a 30-year EUR27 million note with a fixed coupon of 1.77%.
The company added: "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 company added that Banco Santander SA acted as the placement agent.
Chair Fiona McBain added: "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."
Shares in the investment company were 0.4% higher at 599.15 pence each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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