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Barnett's Edinburgh Trust ups gearing limit to 25%

by James Phillipps on Jul 18, 2014 at 13:55

Barnett's Edinburgh Trust ups gearing limit to 25%

Edinburgh Investment Trust  has increased its maximum permitted gearing to 25% and refinanced a £100 million credit facility.

Following the trust’s annual general meeting today, the board told the stock market that shareholders had approved the increase in its gearing limits, but stressed that manager Mark Barnett (pictured) ‘has no intention’ of increase its current borrowing to that level.

The trust’s previous investment policy, which had not been reviewed for a number of years effectively capped borrowing at £200 million, equivalent to 16.3% of net asset value (NAV). Its net gearing is currently 15.8%.

Separately, Edinburgh said it had redeemed £100 million of 11.5% debenture stock and this has been refinanced with a £100 million credit facility with Bank of New York Mellon. The company also has £100 million of 7.75% existing debenture stock, which is to mature in 2022.

The trust announced it will pay a final dividend of 8.5p per share for the year to the end of March and this will be paid on 31 July. The stock went ex-dividend on 11 June.

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