Merchants Trust Regulatory News (MRCH)

LEI: 5299008VJFXCUD2EG312

12 December 2024

The Merchants Trust PLC

Long term fixed rate borrowing

The Merchants Trust PLC (the Company) has today agreed an issue of two £25 million fixed rate 15 year secured private placement notes at a coupon of 5.91% (the Notes), raising total proceeds of £50 million.

The funding date will be 21 January 2025. Interest will be payable semi-annually to one institutional investor on 21 July and 21 January (first payment on 21 July 2025) and quarterly interest will be payable to the other institutional investor on 21 April, 21 July, 21 October and 21 January (first payment on 21 April 2025). The Notes shall be direct secured obligations of the Company and rank pari passu with all other secured indebtedness of the Company.

The purpose of the Notes is to take advantage of the Company's ability to use gearing which is expected to enhance long-term investment performance, and to provide fixed rate long or medium dated financing at a pricing level the Company considers attractive.

The proceeds of the Notes will be used to repay borrowings of £42m (taken out in 2019) which mature end of January 2025 and for other investment and general corporate purposes.

Colin Clark, Chairman said "The board believes borrowing is beneficial for shareholders as it can enhance longer term returns, provided the investment portfolio total return exceeds the cost of debt, albeit with the risk of higher volatility in capital returns. The new borrowing will increase the weighted average duration of drawn debt from 10.6 years to 16.4 years with the overall average cost of debt remaining at 5.1%."

Disclaimer

The notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Act") and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act. This notice is for information only, does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

For further information, please contact:

Allianz Global Investors

Stephanie Carbonneil, Head of Investment Trusts

Tel: 020 3246 7539