Baillie Gifford’s Monks Trust raises £100m debt

Baillie Gifford said on Thursday its £2.5 billion Monks Investment Trust plc raised £100 million of long-term debt, a move that takes the closed-end fund’s gearing into line with its 10% target level.

Shares of Monks have risen 24% over the past 12 months.

The fund’s biggest investments include an £88 million stake in, £68 million in South African e-commerce group Naspers, £62 million in Google parent Alphabet and £55 million in Moody’s Corp, according to Bloomberg data.

Monks chairman James Ferguson said: “I am delighted that Monks has been able to raise private placement debt at highly attractive long-term rates.

“This is reflective of an established investment approach and the attractiveness of Monks’ proposition.

“The board is confident that the investment of these proceeds will enhance the long-term returns for our shareholders.”

Edinburgh-based Baillie Gifford has assets under management and advice of around £260 billion.

Monks said: “The Monks Investment Trust PLC (Monks) announces that it has issued £100 million of long-term, fixed rate, senior, unsecured privately placed notes.

“This transaction provides the company with further long-term financing at very attractive rates.

“The board remains committed to the strategic use of borrowings for the company in order to enhance returns to shareholders over the long term and has set a guideline gearing level of 10%.

“This new £100m financing will be available to bring Monks’ level of gearing into line with this target level.

“The new privately placed notes are being issued in two tranches: £60 million with a fixed coupon of 1.86% to be repaid in 2054 and £40 million with a fixed coupon of 1.77% to be repaid in 2045.

“Coupons will be payable semi-annually. The funding date for both tranches is the 7th August 2020. 

“Centrus Financial Advisors Ltd acted as sole placement agent for the transaction.”