Northern Trust embroiled in YouTube fundie saga

Northern Trust will have to approve any investments made by Neil Woodford, who famously took to YouTube to apologise for the suspension of his fund, in a fresh blow for the fundie.

On Friday, Woodford Patient Capital Trust announced to the London Stock Exchange it had come to new terms with Northern Trust on an overdraft facility provided by the bank.

The trust has a borrowing facility of up to £150 million and is permitted under its investment policy to borrow up to 20% of net asset value at the time of borrowing.

"The company's borrowings as at 4 September 2019 were £113.7 million. While the absolute level of borrowings has fallen since the last update on 29 July 2019, the gearing position has increased marginally to 17.1% of net asset value as a result of the recent reduction in the company's net asset value," the statement said.

The Northern Trust facility contained provisions limiting borrowing to an amount based on the quoted and unquoted value of holdings.

In the event that the portfolio valuation changes so that the amount drawn down under the facility exceeds, the trust will be required to reduce borrowing to bring the draw down to an acceptable level.

Now, Woodford Patient Capital Trust has agreed with Northern Trust to have: "Greater flexibility around certain obligations relating to the borrowing base for a period of time while the company pursues the disposal of certain unquoted assets."

Woodford Patient Capital Trust has agreed to make no further investments during this time without the prior consent of its lender - Northern Trust.

It added that consent has already been provided for certain existing investment commitments.

Woodford Patient Capital Trust says it will seek to reduce borrowings over time as realisations are achieved.

At the end of August, Link Fund Solutions (the authorised corporate director of the suspended Woodford Equity Income Fund) confirmed it does not expect the suspension of the fund to end until at least December.

Link said in a statement: "We appreciate that the ongoing suspension of the fund will be causing you inconvenience and anxiety."

"The decision to continue with the suspension is to ensure investors' interests are protected. It affords Neil and the team the required time to execute the changes to the portfolio that we have outlined previously, in order to deliver the best possible outcomes for you, our investors."

Read more: Northern TrustWoodford Patient Capital TrustNeil WoodfordLink Fund SolutionsLondon Stock ExchangeWoodford Equity Income Fund
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