Lowland to issue £30m of long-term loan notes
New facility will add flexibility and enable repayment of some shorter-term debt
Lowland Investment Company (LWI) has announced it is to issue £30m in sterling-denominated loan notes. The senior unsecured private placement notes will mature in January 2037 and will carry a fixed-rate annualised coupon of 3.15%, paid in two instalments in July and January.
The notes will raise LWI’s total borrowing capacity to £115m, from a previous £85m. If all of the borrowing were drawn and no cash were held, gearing would equal LWI’s maximum permitted 29.9%. However, some of the new borrowing is likely to be used to pay off shorter-term debt. At 31 October 2016 LWI had net gearing of 7%, compared with 16.7% at the 31 March half-year-end.
LWI’s board comments that the new notes will broaden the maturity profile of LWI’s debt, which currently consists of a £25m two-year loan facility and a three-year loan facility of up to £60m. The new facility will be used for investment and general corporate purposes.
Read our initiation note on Lowland here.
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