Henderson High Income becomes the latest trust to secure long term debt at a low rate


#1

Originally published at: http://whichinvestmenttrust.com/henderson-high-income-becomes-the-latest-trust-to-secure-long-term-debt-at-a-low-rate/
The move follows that of several peers in taking advantage of what is likely to be a once in a lifetime opportunity to secure long term borrowing at a low rate, and it is hoped will help contribute towards its ongoing outperformance. Henderson High Income (LON:HHI) has issued a £20m fixed rate 19 year bond…


#2

I wonder why more investment aren’t doing this right now because 3.67% is an easy number to beat, surely! I’ve read on Citywire that unit trusts are become more competitive with investment trusts because the cost of Unit Trusts are coming down. Well they still can’t borrow and being able to do so at such a low rate gives ITs such a strong competitive advantage.

Many of the old debentures are for unbelievably high interest rates, 10, 11 or more per cent. I’m fairly sure they’ll never see rates as low as these in future so get a move on IT managers I say.


#3

yeah I agree @jonno 3.67% is stupidly cheap and if a fund manager cant deliver better returns than this then he/she is not worth their mettle.

I think Ben Lofthouse has been a bit too cautious though in only borrowing £20 million. Henderson High Income is worth a look at now though I note they don’t have a lot of cash in the reserves, roughly 4 months worth which aint a lot.


#4

£20 million represents 10% gearing @anthonys @jonno. Gearing is great in rising stock markets but not so cool in down markets. I reckon that 10% fixed borrowing for what is an income focused trust is about right.

I agree that other trusts, especially growth focused ones should be looking at nabbing long term arrangements round about now too though.

The performance of this trust has been very good and it’s worth noting that unit trusts can’t keep back any of their income Anthony.


#5

It yields almost 5% - no wonder it’s on a premium. I’m surprised it’s only 2.5%.

I think the manager is quite cute too, not a reason to buy perhaps but it helps…

Don’t know why I’m seeing a Which investment trust.com logo this Youtube video?


#6

No I think you’ve got that wrong love. that’s the video for Henderson International Income, NOT the High income trust.

Henderson High Income is below…

I see what you mean about the Which logo on the Youtube channel, perhaps they’ve got their own channel but it looks like there’s only Henderson videos on it @whichinvest ?


#7

Oops! my bad :hankey:


#8

@sandradore @citygirl Yes it is our Youtube channel. It hosts the video content we display in the Henderson mini websites but there will be content from other managers in the future.


#9

It’s easy to get confused between Henderson High Income and Henderson International Income @sandradore @citygirl. I named them the wrong way around in another post. Lucky they let you edit your posts on here, some forums don’t.

I think this might just be a reason to buy this trust (the low interest rate, not the confusion with the name) because performance has been good but they don’t have much reserves to back them up in tough times. This is extra weaponry in the armoury.Nice one.