13 March 2018
BlackRock Latin
American Investment Trust plc (the “Company”)
(LEI: UK9OG5Q0CYUDFGRX4151)
Future Dividend
Policy
As part of the Board’s overall strategy to reduce the discount
at which the Company’s shares trade, the Board believes that
enhancing demand for the Company’s shares and making them more
attractive to new investors is an important component. Over the
last few years, there has been a growing demand for investment
trust shares from retail investors particularly for shares that
offer an attractive, and regular dividend. With this in mind, the
Directors in conjunction with the Investment Manager and the
Company’s broker have reviewed the Company’s dividend policy. As a
consequence, the Directors are proposing to amend the dividend
policy as follows:
-
The Company’s intention is to pay a regular quarterly dividend
equivalent to 1.25% of the Company’s US Dollar NAV;
-
The dividends will be calculated based on the US Dollar NAV at
close of business on the last working day of December, March, June
and September;
-
The dividends will be paid in November, February, May and August
each year; and
-
Dividends will be financed through a combination of available
net income in each financial year and revenue and capital
reserves.
As the new policy is subject to shareholder approval at the 2018
AGM in May, the year to 31 December
2018 will represent a transitional period with three
quarterly dividends of 1.25% of the respective quarter end NAVs for
June, September and December 2018
being paid in August and November
2018 and February 2019
respectively. For illustrative purposes, based on the year-end US
Dollar NAV of 710.17 cents per share,
this would result in dividends of 26.63
cents being paid in respect of the 2018 financial year,
representing a yield of 4.3% based on the share price at
31 December 2017 (which compares to
the current dividend yield of 2.1% for the year to 31 December 2017).
This proposed increase in the level of dividend will be funded
out of capital reserves to the extent that current year revenue and
revenue reserves are insufficient. The Board believes that pressure
placed on the investment managers to seek a higher income yield
from the underlying portfolio itself could detract from total
returns. By uncoupling the dividend policy of the Company from the
split of capital and revenue returns generated by the portfolio,
the Board’s aim is to attract new buyers for the Company’s shares,
whilst maintaining the portfolio’s ability to generate attractive
total returns.
The Board believes that the change to the Company’s dividend
policy will widen the appeal of the Company to investors as it will
provide a more attractive yield. In turn, the increased demand for
the Company’s shares is expected to result in a narrowing of the
discount to net asset value over time.
The Board anticipates that this change of policy will be
permanent. However, it will keep the policy (and its expected
positive impact on the discount level) under review and may amend
it in the light of potential changes in the expected total returns
to be earned from the portfolio or changes in the nature of returns
desired by shareholders.
This announcement contains inside
information as defined in EU Regulation No. 596/2014 and is in
accordance with the Company's obligations under Article 17 of that
Regulation. Upon the publication of this announcement
the inside information within is now considered to be in the public
domain.
For further information, please
contact:
Simon White, Managing Director,
Investment Trusts, BlackRock Investment Management (UK) Limited
Tel: 020 7743 5284
Press Enquiries:
Lucy Horne, Lansons Communications –
Tel: 020 7294 3689
E-mail: lucyh@lansons.com