Centrus arranges ¥12bn private placement for The Baillie Gifford Japan Trust PLC

Transaction overview

The Baillie Gifford Japan Trust PLC (“Japan Trust”) is an investment trust focused on investing in Japanese companies. Managed by Baillie Gifford & Co, a global asset management firm based in Edinburgh with assets under management of approximately £225 billion, this trust aims to provide capital growth by investing in stocks of Japanese companies with high growth potential.

On the 24th July 2024, Japan Trust announces that it has issued ¥ 12bn of fixed rate, senior, unsecured privately placed notes split into three tranches of ¥4bn, maturing in 5, 10 and 14 years from the funding date of 20 November 2024.

Centrus’ solution

Japan Trust has issued three tranches of privately placed Notes:

Coupons are payable semi -annually.

• The proceeds of the Notes will be used to repay existing bank debt of ¥9.3 billion maturing in November 2024 and ¥2.6 billion maturing in March 2025.
• Centrus acted as arranger of the issue of Notes, advising on the structure of the transaction, drafting an investor presentation and arranging meetings with a selected group of institutional investors.

Transaction outcome

This transaction provides the Japan Trust with medium-term financing at a range of maturities and a competitive weighted average interest rate of 2.05%.

The Japan Trust Board remains committed to the strategic use of borrowings for the Company in order to enhance returns to shareholders over the long term. This new financing will maintain availability of earing capacity for the Japan Trust and fixes the cost of borrowing for an extended period, providing certainty.

“Having considered various financing options, the Japan Trust board decided to access the institutional private placement market with its debut financing.

Following meetings with selected investors, Japan Trust received bids with maturities ranging from 3 to 20 years. A single investor was chosen which provided tranches of ¥4 billion with an average maturity of just under 10 years thereby achieving a blend of medium term finance and at an attractive overall cost.

The investor agreed to defer settlement until November 2024 thereby allowing Japan Trust to coordinate the closing of its new financing with the maturity of bank debt of ¥9.3 billion in November with a further ¥2.6 billion bank debt maturing in March 2025.”

Robert St John, Consultant – Centrus

For more information please contact Robert St John.

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