29th Apr 2019 18:04
LONDON (Alliance News) - British Empire Trust PLC said Monday it has entered into an agreement with Scotiabank Europe PLC for a JPY4.0 billion, about GBP27.7 million, revolving credit facility for three years.
British Empire Trust will use the funds to repay its GBP15 million debenture stock early. The debenture stock was set to mature at the beginning of July 2023. The total cost of redeeming the debt is GBP19.9 million.
Following the refinancing, British Empire Trust's weighted average interest on all of its borrowings will decrease to 2.9% from 4.3% currently.
"The company's board has taken the decision to repay the debenture early in order to achieve a balance of financing sources and maturities. The revolving credit facility introduces some flexibility in managing the company's gearing, which in recent years has been entirely through long term, fixed rate debt and borrowing in Japanese yen which provides a natural hedge against exchange rate fluctuations," said Chair Susan Noble.
Noble added: "While the cost of redemption will initially reduce the net asset value per share by 0.1%, or 0.8 pence per share, with debt at fair value and 0.5%, or 4.2p per share, at book value, the refinancing exercise is expected to reduce the total annual interest cost by approximately GBP930,000, or 0.8 pence per share, based on current short term interest rates for the revolving credit facility. This will potentially marginally enhance both the revenue earnings and capital returns."
Shares in British Empire Trust closed up 0.5% Monday at 742.00 pence each.