1st Jun 2018 11:51
LONDON (Alliance News) - Brunner Investment Trust PLC said Friday it has priced an issue of a GBP25 million fixed rate 30-year unsecured private placement note at a coupon of 2.84%, with the funding date being June 28.
Proceeds will go towards the early repayment of the company's portion of Fintrust Debenture PLC borrowings of GBP28 million.
Brunner has two tranches of debt from Fintrust, the first being GBP15 million issued in 1993 at an interest rate of 9.3% , and the second being GBP13 million, assumed from an existing borrower in 1998 at an interest rate of 6.0%.
The debt is due to mature in 2023, and the total cost of redeeming the debt is GBP39.4 million.
Following the refinancing, Brunner's weighted average interest on all structural borrowings and preference stock will drop to 2.9% from its current level of 7.7%.
"The board has taken the decision to repay Fintrust early in order to achieve a balance of financing sources and maturities and to lock into a long term rate at pricing levels that the company considers to be highly attractive. While the cost of redemption will initially reduce the NAV per share by 0.7% with debt at fair value and 2.4% at book value, the refinancing exercise described above is expected to reduce the total annual interest cost by approximately GBP1.3 million which will enhance both the revenue earnings and capital returns," Brunner said in a statement.
Shares in Brunner Investment Trust were up 0.6% at 797.50 pence on Friday.
Related Shares:
Brunner Inv.tst