Invesco Perpetual is offering shareholders in the Invesco Leveraged High Yield Trust a share in an £...
Invesco Perpetual is offering shareholders in the Invesco Leveraged High Yield Trust a share in an £11m placing.
The placing of shares has already been fully subscribed by institutional clients, although existing investors can still participate. The placing is designed to help the trust avoid any danger of breaching its banking covenants and involves the issue of 47.7 million shares at 24p each.
The highly geared portfolio, managed by Paul Read and Paul Causer, invests in European high yield corporate bonds, with the aim of providing a high total return, primarily in the form of income. A combination of weak conditions in the high yield bond market and the trust's high level of gearing has meant the trust's NAV has performed poorly over the last year.
As a result of the raising, the trust's bond portfolio will effectively double in size to £20m and its capital gearing will be reduced from £51.88m of total assets to £46.05m.
Charles Cade, analyst at HSBC, said: 'The fund raising increases the flexibility of the managers' stock selection and considerably reduces the strain of the revenue account.'
Graeme Proudfoot, head of specialist funds at Invesco, said existing shareholders can subscribe for ordinary shares and those taken up will be clawed back from those already with institutions. Applications must be received by 19 April.
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