Issue of Debt

RNS Number : 9459Z

Scottish Mortgage Inv Tst PLC

16 January 2020

 

Scottish Mortgage Investment Trust PLC

Scottish Mortgage Investment Trust PLC raises further borrowings of

£188 million

16 January 2020

Scottish Mortgage Investment Trust PLC announces that it has raised a further c£188 million in long-term, fixed rate, senior, unsecured private placement notes, denominated in a mixture of Sterling and Euros. This transaction has provided the Company with further long-term financing at very attractive rates.

These new notes are part of Scottish Mortgage's existing gearing facilities. The Board remains committed to the strategic use of borrowings for the Company, in the belief that gearing the portfolio in this way will enhance returns to shareholders over the long term. As Scottish Mortgage's assets have grown in recent years, the Board has increased the absolute level of the borrowings in order to maintain the relative level of gearing of the portfolio. This is the third set of private placement notes issued by the Company.

The new private placement agreement provides for total additional borrowings of £188 million, through the issuance of three notes: one 20-year note for £150 million with a fixed coupon of 2.30%, one 25-year note for EUR 18 million with a fixed coupon of 1.65% and a 30-year note for EUR 27 million with a fixed coupon of 1.77%. All coupons will be payable semi annually. The funding date for all three tranches was the 15 January 2020.

Once again, Banco Santander S.A. London acted as the placement agent for the transaction.

Fiona McBain, Chairman of Scottish Mortgage, says:

"The Board views the capacity to issue modest amounts of debt as one of the principal advantages of Scottish Mortgage's investment trust structure.  I am delighted to say that that the Company continues to be able to raise private placement debt at highly attractive long-term rates. This is reflective of the enduring strength of Scottish Mortgage's proposition and should enhance the long-term returns for our shareholders."

 Performance

Periodic Performance to 31 December 2019 (%)

	1 Year	3 Years	5 Years	10 Years
Share Price	24.8	84.1	143.1	509.4
NAV	26.8	85.3	145.1	419.3
Index*	22.3	34.4	81.2	198.2

Discrete Annual Performance (%)

	01/01/15 - 31/12/15	01/01/16 - 31/12/16	01/01/17 - 31/12/17	01/01/18 - 31/12/18	01/01/19 - 31/12/19
Share Price	13.3	16.5	41.1	4.6	24.8
NAV	14.8	15.3	40.6	4.0	26.8
Index*	4.0	29.6	13.8	-3.4	22.3

Past performance is not a guide to future returns.

Performance source: Morningstar and underlying index provider, total return.

*FTSE All-World Index

For further information please contact:

Catharine Flood, Corporate Strategy Director for Scottish Mortgage Investment Trust PLC Baillie Gifford & Co Ltd	0131 275 2718 [e-mail]
Tony Fordham, Managing Director Banco Santander S.A. London Branch	020 7756 7205 [e-mail]
Jon Atkins, Four Communications	020 3697 4200 [e-mail]

Notes to editors

Scottish Mortgage Investment Trust PLC

Scottish Mortgage offers an actively managed investment trust, investing in a high conviction, global portfolio of companies with the aim of maximising its total return to its shareholders over the long term. It is jointly managed by James Anderson and Tom Slater. Both are partners of Baillie Gifford & Co.

Scottish Mortgage was founded in 1909 initially to offer loans to rubber growers in Malaysia. It is now the UK's largest conventional investment trust with gross assets of over £8.9 billion* (as at 31 December 2019). It has a strong focus on providing a low-cost long-term investment proposition to its shareholders, with an ongoing charge of 0.37% for the financial year to 31 March 2019.

* Total fair value of loans & debentures amount to £763.7 million as at 31 December  2019.  The potential gearing of the Company was 8.4% of shareholders' funds and the invested gearing level was 8.2% on the same basis.

Baillie Gifford

Baillie Gifford & Co Limited is the manager of Scottish Mortgage Investment Trust PLC. Baillie Gifford & Co currently employs 1,285 people as at 31 December 2019 and has assets under management and advice of £206 billion as at 30 September 2019. An asset management firm founded in 1908, it is headquartered in Edinburgh where most of its staff are based.

With any investment, capital is at risk.  The value of shares can fall as well as rise and investors may not get back the amount invested. The trust's risk could be increased by its investment in unlisted investments.  These assets may be more difficult to buy or sell, so changes in their prices may be greater.  Due to the trust's investments in overseas securities, changes in the rates of exchange may also cause the value of investments to go down or up. Scottish Mortgage also invests in emerging markets and is only suitable for those investors prepared to accept a higher level of risk. The trust can borrow money to make further investments (sometimes known as 'gearing' or 'leverage'). The risk is that when this money is repaid by the trust, the value of the investments may not be enough to cover the borrowing and interest costs, and the trust will make a loss. If the trust's investments fall in value, any invested borrowings will increase the amount of this loss.

For Key Information Documents for Scottish Mortgage, please visit our website at www.bailliegifford.com

This information has been issued and approved by Baillie Gifford & Co Limited which is authorised and regulated by the Financial Conduct Authority (FCA). The investment trusts managed by Baillie Gifford & Co Liminted are listed UK companies and are not authorised or regulated by the Financial Conduct Authority.

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