Centrus advises SAINTS on £80m Private Placement
The Scottish American Investment Company P.L.C. (SAINTS) – an Investment Trust with assets as at end February 2019 of approximately £600m has successfully completed a long-term financing in the private placement market with advice from Centrus. The advisory team acted as a sole placement agent for the £80m transaction. The buyer of the notes is The Pension Insurance Corporation Plc.
The transaction comprises two separate tranches of £40m each with maturities of April 2045 and April 2049 and a fixed coupon of 3.12% payable semi-annually. Drawdown of the financing is deferred until 11th April 2022 and the proceeds will be used to redeem SAINTS’ current £80m debenture stock due April 2022.
SAINTS is managed by Baillie Gifford and aims to be a core investment for private investors seeking income. Its objective is to grow the dividend at a faster rate than inflation by increasing capital and growing income. The focus of the portfolio is on global equities, but investments are also made in bonds, property and other asset types.
Peter Moon, Chairman of SAINTS, said: Our current borrowing arrangements date from a time when the prevailing interest rates were much higher than today, and the existing debenture bears a coupon of 8%. The existing debenture cannot be repaid early without significant penalty. However, I am pleased to say that we have been able to take advantage of current market conditions to agree replacement long-term borrowing at a fixed rate of just over 3% per annum.
Robert St John, Managing Director at Centrus commented: We are delighted to have worked closely with SAINTS and Baillie Gifford to achieve an attractive refinancing solution for SAINTS’ £80m debenture.