THE #735m Monks Investment Trust has taken advantage of declining interest rates with the issue of #40m of debenture stock, but has no plans to immediately invest the cash.
Edinburgh-based fund manager Baillie Gifford intends to eventually spend the proceeds on the UK and internationally-quoted securities which the trust invests in. This relatively cheap form of borrowing will allow Monks to secure greater returns by purchasing more shares than would otherwise be possible.
However, investment manager Douglas McDougall said proceeds from the debenture issue would initially be held as cash or in fixed-interest securities until ''more favourable opportunities in equities occur''.
''We would want to go in at the low end of the market,'' he said.
The debenture, which was issued at the price of #96.189 per #100 nominal of stock, will increase Monks' gearing from 5.5% to 11% of shareholder funds.
The debenture issue has been completely underwritten by Greenwich NatWest, which is also acting as sole placing agent.
The new stock will rank equally in all respects with Monks' #40m of 11% debenture stock.
Dealings on the London Exchange are expected to begin on May 26.
Interest payments to stock-holders will be made in equal half-yearly instalments on March 1 and September 1.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article