Baillie Gifford’s £2.4 billion Monks Investment Trust plc announced that it has issued £74 million of fixed rate, senior, unsecured privately placed notes, denominated in Euros and Japanese Yen, over periods ranging from seven to 14 years.

“This transaction provides the company with medium-term financing at a range of maturities and a competitive weighted average interest rate of 3.96%,” said the fund.

“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 financing will be available to bring Monks’ level of gearing into line with this target level, and to reduce the average cost of borrowing.

“The new privately placed notes have been issued in four tranches: EUR18 million with a fixed coupon of 4.30% to be repaid in 2030; EUR35 million with a fixed coupon of 4.29% to be repaid in 2033; EUR18 million with a fixed coupon of 4.55% to be repaid in 2035; and JPY2,500 million with a fixed coupon of 2.17% to be repaid in 2037.

“Coupons will be payable semi-annually. The funding date for all tranches is 12 December 2023.

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

On December 8, Monks said it had continued with “a run of poor relative returns that began two years ago” in what has been “a bruising period performance-wise.”

Announcing the fund’s results for the six months to October 31, 2023, Monks chairman Karl Sternberg said it produced a net asset value (NAV) total return of -3.3% compared to +2.1% for the comparative index (FTSE World in sterling). 

The fund’s share price total return was -7.3%, as its discount widened from 8.7% to 11.6%. 

The current managers of the Monks fund are Spencer Adair and Malcolm MacColl.