Witan to redeem £65 million 6 1/8% bonds due 2025 early

By Sarah Lizee

Olympia, Wash., March 25 – Witan Investment Trust plc plans to redeem its £65 million 6 1/8% secured bonds due 2025 early, according to a notice.

The issuer gave 30 days’ notice to holders, as required.

Holders will receive a break payment reflecting the difference between the coupon and the return available on U.K. Gilts with a comparable redemption date.

Although the final redemption amount will be fixed nearer to the redemption date, the estimated cost not already reflected in the company's daily NAV announcements is about £6 million, or 0.4% of the net asset value (including income, with debt at fair value).

The roughly £85 million repayment proceeds will be funded from existing cash resources and short-term borrowing facilities.

“The early redemption, particularly in current volatile conditions, will enable the company to make greater use of low-cost short-term borrowings repayable at will,” Witan said in the notice.

At current interest rates, there would be an estimated £3 million per annum interest saving if the secured bonds were replaced with short-term borrowings, or up to £3.9 million at times when part or all of the borrowings were not drawn, Witan noted.

It will also increase the company's flexibility should it subsequently wish to take advantage of current low interest rates to extend the term of the borrowings rather than waiting until 2025 to do so, Witan added.

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