The boards of split capital investment trusts continue to pay down the debt that has exacerbated the...
The boards of split capital investment trusts continue to pay down the debt that has exacerbated the falls in their net asset value.
The board of Legg Mason Investors Strategic Assets, a split capital trust with both income and zero shares, has announced plans to repay a further £11.585m in debt. This, according to HSBC, leaves remaining bank debt of £0.5m.
In paying down its debt the trust will incur breakage costs, a penalty designed to compensate the lending bank for its loss of revenue, of just under £300,000.
The BFS Absolute Return Trust has repaid £2m of its existing bank loan, leaving total borrowings of £33.5m. Both trusts have seen their share prices collapse in the wider capitulation in the split capital sector.
From a 52-week high share price of 63.5p a share on 16 October last year, its income shares were worth just 0.5p on 12 August this year.
The income shares of the Legg Mason trust have fared almost as badly and fell from 85p on 16 October last year, their 52-week high, to just 7.5p, their 52-week low, on 7 October this year.
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