Dod1010 wrote:It certainly looks like a good rate but it is quite a commitment, to borrow £30 million fixed for 37 years, whatever the interest rate.
And despite your headline, the article is simply speculating on what Merchants might do when their hideously expensive debt matures over the next few years, but thanks anyway.
Dod
You're welcome.
The article was about borrowings at Witan and
Merchants.
I have always avoided
Merchants because of its expensive debt. I recollect it also being a concern of L'Uni. It will be interesting to see what they replace it with when it matures.
Another fund that has suffered from having expensive long-term debt in my view is, Merchants (MRCH), the £528 million UK equity income trust managed by Simon Gergel at Allianz Global Investors.
In 1987 Merchants borrowed money in an unnecessarily complicated deal whereby it paid 7.16% interest in the first year, rising by 7.5% a year until the rate hit 14.75% in 1998 and trundled on at that level until the debt expires next January. I can’t conceive why Merchants’ directors ever thought that was a good idea.
I hold Witan, but not
Merchants.