Aberdeen Investment Trusts has extended the term of its preferred income trust by changing the structure and issuing new shares in the trust.
The trust will now have a proportion of European fixed interest securities, including corporate bonds, in addition to its original focus on the UK fixed interest securities.
The Preferred Income Trust is likely to attract investors who require income and who are willing to take a medium to high risk with their capital.
New ordinary shares and zero-dividend preference shares have been issued to extend the prospective wind-up date of the trust to at least 2008. The number of zeros in the trust will be reduced and an increased amount of bank debt will play a bigger part in gearing the trust.
This restructuring allows the company to increase dividends on ordinary shares from 17.6p to 19.2p per share. These dividends will now be paid monthly instead of quarterly.
However, the restructuring of the trust could increase its investment risk. Many European corporate bonds that are currently issued are in the telecommunications sector, which is quite high risk.
According to Standard and Poors the preferred income trust is ranked 2 out of 13 funds based on £1,000 invested on a bid-to-bid basis with net income invested over three years to September 29, 2000.