DJ 2025 Interim Results
M&G Credit Income Investment Trust plc (MGCI)
2025 Interim Results
17-Sep-2025 / 07:00 GMT/BST
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LEI: 549300E9W63X1E5A3N24
M&G Credit Income Investment Trust plc
Half Year Report and unaudited Condensed Financial Statements
for the six months ended 30 June 2025
The full version of the Half Year Report and unaudited Condensed Financial Statements can be obtained from the
following website: www.mandg.co.uk/creditincomeinvestmenttrust
Chairman's statement
Performance
Your Company delivered a NAV total return of +2.97% for the six months to 30 June 2025, underperforming the benchmark
of SONIA +4%, which returned +4.26%. Comparable investment grade fixed income indices such as the ICE BofA Sterling
Corporate and Collateralized Index and the ICE BofA 1-3 Year BBB Sterling Corporate & Collateralized Index returned
+3.48% and +3.54% respectively. The Company's NAV total return compared favourably to high yield indices such as the
ICE BofA European Currency Non-Financial High Yield 2% Constrained Index (+2.84%).
The Investment Manager kept the portfolio defensively positioned throughout the half year because it believed, and
continues to believe, that credit spreads (which are close to historic lows) are not compensating investors for longer
term corporate risk. Credit spreads began and ended the period at roughly the same level although there was a brief
period in March and early April which saw spreads widen, as financial markets digested tariff implications and braced
for a global trade war. Shortly thereafter, markets rallied on the announcement of tariff suspensions, and credit
spreads narrowed again.
At times of tight credit spreads, the defensive positioning of the portfolio can be expected to result in a shortfall
against the benchmark unless and until there is sufficient market volatility to enable our Investment Manager to create
compensating capital gains. The brief period of credit spread widening in the middle of the period under review was
helpful but was not long enough to make a material difference. In addition, there was underperformance from negative
developments in two private credits which are described in more detail in the Investment Manager's Report.
Share issuance and discount management
During the half year, your Company increased its market capitalisation by over GBP31 million as sustained demand for
share issuance continued to support its growth. This helps to improve liquidity in your Company's shares as well as
reducing the ongoing charges ratio. Share issuance at an appropriate premium to NAV underpins the Zero Discount Policy
which seeks to ensure that Ordinary Shares trade close to NAV in normal market conditions.
In March, the Company issued 6,647,969 new Ordinary Shares via a placing and retail offer, whilst an additional
26,950,000 new Ordinary Shares were sold through regular tap issues over the period to 30 June 2025.
This was facilitated by the renewal of the relevant shareholder issuance authorities at a General Meeting held in
February 2025. However, the continued pace of investor demand for shares meant that by May it had become evident that
the Company's capacity to issue Ordinary Shares to meet market demand and to maintain the Zero Discount Policy under
the existing authorities would soon be exhausted. The Company therefore published a new Prospectus in order for share
issuance to continue. Authority was approved by shareholder vote at a General Meeting held on 28 July 2025, for the
capacity to issue up to 150 million Ordinary Shares for a period of 12 months.
Issues of Ordinary Shares are made at a price not less than the latest published NAV together with a premium intended
to cover the costs of the relevant issue and to contribute to the costs of publishing the Prospectus mentioned above.
The Company's Ordinary Share price traded at an average premium to NAV of 1.8% during the period ended 30 June 2025. On
30 June 2025 the Ordinary Share price was 95.9p, representing a 2.2% premium to NAV as at that date. Since the period
end, a further 10,750,000 Ordinary Shares have been issued.
Dividends
Your Company is currently paying four, quarterly interim dividends at an annual rate of SONIA +4%, calculated by
reference to the adjusted opening NAV as at 1 January 2025. The Company paid dividends of 1.96p and 1.92p per Ordinary
Share respectively for the quarters to 31 March 2025 and 30 June 2025.
Your Company's Investment Manager continues to believe that an annual total return, and thus ultimately a dividend
yield, of SONIA +4% will continue to be achievable although there can be no guarantee that this will occur in any
individual year.
Outlook
Financial markets have calmed since the turmoil of early April, but tariff uncertainty remains. In spite of this,
investors currently seem to be shrugging off the associated chaos and headlines. US and UK equity markets have recently
reached record highs whilst sterling investment-grade credit spreads hover around multi-decade lows, reflecting
investors' strong appetite for risk. Widespread fears about an inflation surge driven by tariffs have yet to
materialise, although it will take some time for the effects to work through what is a highly complex and
interconnected global trade system. Many commentators believe that current levels of market exuberance are unlikely to
last.
Elevated levels of uncertainty create challenge but also opportunity. The Investment Manager feels it is now more
important than ever to remain patient and disciplined in its investment approach, and at current valuations will
continue to keep the portfolio defensively positioned, prioritising credit quality over yield. It has constructed a
portfolio that it expects to be able to withstand wider market volatility but one which can be rapidly reshaped to take
advantage of any such volatility when the opportunity presents itself. This forms one of the core pillars of the
Company's investment strategy, which is for the Investment Manager to seek to trade the liquid, public portion of the
portfolio in order to generate gains which should contribute to the return target of SONIA +4%. Your Company has access
to an undrawn GBP25 million credit facility and has a further GBP39 million invested in high credit quality, daily dealing
ABS funds, ready to be reallocated when the market conditions for adding risk materialise.
David Simpson
Chairman
16 September 2025
Financial highlights
Key data
As at As at
30 June 2025 31 December 2024
(unaudited) (audited)
Net assets (GBP'000) 169,636 139,995
Net asset value (NAV) per Ordinary Share 93.83p 95.11p
Ordinary Share price (mid-market) 95.9p 96.6p
Premium to NAVa 2.2% 1.6%
Ongoing charges figurea 1.20% 1.28%
Return and dividends per Ordinary Share
Six months ended Year ended
30 June 2025 31 December 2024
(unaudited) (audited)
Capital return 0.2p 1.5p
Revenue return 2.6p 6.0p
NAV total returna 3.0% 8.1%
Share price total returna 3.5% 14.6%
Total dividends declaredb 3.88p 8.53p
a Alternative performance measure. Please see pages 33 to 34 in the full Half Year Report for further information.
b The total dividends declared in respect of each period equated to a dividend yield of SONIA +4% on the adjusted opening NAV.
Investment manager's report
Going into 2025, the global economic outlook was initially positive, but proposals for broad trade tariffs by the new US administration brought about significant economic uncertainty. Despite moderating, inflation in major economies remained above central bank targets, whilst economic growth slowed considerably which reflected the impact of uncertain global trade policies and fluctuating market conditions. Tariff related volatility peaked in April as global markets were roiled by harsher than anticipated reciprocal tariffs which led to fears of a global recession. This sparked significant volatility resulting in a widening in credit spreads which, although short-lived, presented us with an opportunity to re-engage more meaningfully with the public bond market. We focussed our attention on purchasing investment-grade UK names with little to no direct exposure to tariff risk, deploying GBP3 million during what was ultimately a very brief window of opportunity. Characterising the unpredictability of policymaking under the new Trump administration, a week later the announcement of a 90-day suspension of the reciprocal tariffs catalysed a pronounced recovery which saw credit spreads round-trip to return to pre-April levels, ending the half-year approximately in line with where they started it.
Despite the temporary, tariff-induced spread weakness, the technical backdrop in fixed income remained robust. The combination of relatively high bond yields, a benign outlook for inflation, and the likelihood of lower interest rates ahead, remains appealing to both income and total return investors, which continues to attract capital to the asset class. As a result, demand for corporate bonds is significantly exceeding supply which is keeping volatility contained and credit spreads well-anchored with a bias to becoming tighter.
Having come into the year defensively positioned (as we have been for some time on relative value concerns), our primary focus remained on deploying capital into private assets, investing GBP19 million across 13 new and existing facilities during the period. We continued to find attractive relative value in Regulatory Capital transactions. Additionally, as the Company raised capital via the issue of new Ordinary Shares (as detailed in the Chairman's Statement), we invested some of the proceeds into the M&G European Loan Fund, a cornerstone investment of the portfolio since launch, to prevent dilution of our existing exposure. We were also pleased to close two investment grade transactions in parts of the private market where we are often less active due to tighter pricing; the first, an infrastructure transaction providing senior debt in an Italian road PPP (Public-Private Partnership) project and the second, a senior secured Private Placement transaction backed by future payments from wireless spectrum licenses. Other private transactions saw us allocate additional capital to existing securitisations in the portfolio.
During the period there were notable valuation adjustments to loans from two different private issuers as a result of internal credit rating downgrades, which have been reflected in the Company's latest published NAV. The first credit is undergoing a business restructuring in response to significant (and unforeseen) changes in its target market/ operating environment. The second credit has encountered a short term cash flow problem, which is expected to rectify over the medium term, but which has seen the sponsor commit additional equity to the business. We actively monitor the portfolio for signs of distress and currently have exposure to three issuers, amounting to 0.69% of the latest published NAV, which are either in technical default or at some stage of a restructuring process. These assets are already marked-to-market or, in respect of non-public market instruments, reserved against in your Company's latest published NAV.
The funded private asset portion of the portfolio decreased over the period to 49.66% (versus 52.38% at 31 December 2024) which was largely due to cash received from share issuance outpacing private pipeline deal execution. We continued to deploy proceeds into AA-rated M&G Investment Grade ABS Fund whilst waiting for a number of private transactions to progress to funding later in the year. The portfolio also still has approximately 8% invested in illiquid publicly-listed assets, which are intended to be held to maturity. The portfolio's investment grade holdings increased during the period (78% from 76% previously) relative to sub-investment grade (22% from 24% previously) reflecting our preference for going up in credit quality rather than adding risk.
Outlook
The biggest cost of the tariff war on the global economy may well be the impact of the uncertainty created rather than the direct impact of the tariffs themselves. A confluence of additional risks also weighs on the outlook for the remainder of the year, including (but not limited to) upward pressure on inflation, high geopolitical and conflict risk, rising bond yield term premia, the impacts of fiscal and broader policy dynamics, and the sustainability of the Artificial Intelligence boom, all of which are serving to create a challenging and unpredictable investment backdrop. Despite the considerable downside risks, a paradox exists between credit spreads and the economic outlook, with investors not being sufficiently compensated for the magnitude of these risks. Current levels of market exuberance certainly feel overdone and in our opinion investor aversion to bad news is leading to complacency. At the time of writing, credit spreads are at almost 20-year lows, with BBB credit (the lowest rung of investment grade) offering barely 100 basis points additional return over sovereign benchmark yields.
Under these market conditions, where credit valuations are stretched, we believe that our flexibility in being able to invest across the breadth of both public and private markets can be a powerful differentiator in generating what we feel are the most attractive risk-adjusted returns for our shareholders. It remains as important as ever that we maintain our patient and disciplined investment approach and at current valuations we will continue to keep the portfolio defensively positioned, prioritising credit quality over yield. This positioning is intended to shape the portfolio to be a net beneficiary of any future credit spread widening and market volatility, and whilst this may mean foregoing portfolio returns in the short term, in our opinion it is fundamental to driving strong performance over a longer term investment horizon. When further market volatility gives rise to attractive opportunities, we have access to a GBP25 million credit facility and a further GBP39 million invested in two AAA/AA-rated, daily dealing ABS funds, ready to be reallocated.
M&G Alternatives Investment Management Limited
16 September 2025
Portfolio analysis
Portfolio overview
30 June 2025 31 December 2024
As at
% %
Cash on deposit 3.03 0.97
Public 47.42 46.57
Asset-backed securities 13.98 24.62
Bonds 13.48 14.50
Investment funds 19.96 7.45
Private 49.66 52.38
Asset-backed securities 4.16 4.57
Bonds 3.22 2.06
Investment funds 13.66 11.40
Loans 16.36 23.06
Private placements 1.38 1.25
Other 10.88 10.04
Derivatives (0.11) 0.08
Debt derivatives (0.03) 0.05
Forwards (0.08) 0.03
Total 100.00 100.00
Source: State Street
Geographical exposure
Percentage of portfolio of investments
as at 30 June 2025 (31 December 2024)*
Europe 48.84% (41.80%)
United Kingdom 44.44% (50.90%)
United States 5.22% (4.24%)
Australia 0.97% (1.97%)
Global 0.53% (1.09%)
* Excluding cash on deposit and derivatives.
Source: M&G and State Street as at 30 June 2025
Credit rating breakdown
30 June 2025 31 December 2024
As at
% %
Unrated (0.11) 0.08
Derivatives (0.11) 0.08
Cash and investment grade 78.06 76.40
Cash on deposit 3.03 0.97
AAA 6.19 7.45
AA 16.50 11.16
AA- 0.75 0.60
A+ 1.98 1.21
A 3.36 3.28
A- 2.06 2.77
BBB+ 7.82 10.99
BBB 13.76 13.97
BBB- 11.96 15.11
M&G European Loan Fund (ELF) (see note) 10.65 8.89
Sub-investment grade 22.05 23.52
BB+ 2.19 2.73
BB 4.48 5.32
BB- 3.26 2.26
B+ 2.53 2.17
B 4.57 6.65
B- 0.93 0.83
CCC+ 0.53 -
CCC 0.24 -
CC 0.25 0.32
D 0.06 0.73
M&G European Loan Fund (ELF) (see note) 3.01 2.51
Total 100.00 100.00
Source: State Street
Note: ELF is an open-ended fund managed by M&G that invests in leveraged loans issued by, generally, substantial private companies located in the UK and Continental Europe. ELF is not rated and the Investment Manager has determined an implied rating for this investment, utilising rating methodologies typically attributable to collateralised loan obligations. On this basis, 78% of the Company's investment in ELF has been ascribed as being investment grade, and 22% has been ascribed as being sub-investment grade. The board actively monitors the implied rating to ensure that the original rating remains appropriate.
Top 20 holdings
Percentage of portfolio
of investmentsa
As at 30 June 2025 (31 Company description
December 2024)
M&G Investment Grade ABS Open-ended fund managed by M&G which invests primarily in high grade European ABS with on
Fund average AA risk. The fund seeks to find value in credits which offer an attractive structure
or price for their risk profile. (Public)
13.77% (8.50%)
Open-ended fund managed by M&G which invests in leveraged loans issued by, generally,
M&G European Loan Fund substantial private companies located in the UK and Continental Europe. The fund's objective
is to create attractive levels of current income for investors while maintaining relatively
low volatility of NAV. (Private)
13.66% (11.40%)
Open-ended fund managed by M&G investing in a diversified pool of investment grade ABS. In
M&G Senior Asset Backed usual market conditions, the fund will invest predominantly in senior tranches of ABS, with
Credit Fund 80% expected to be of a credit rating of at least AA- or higher. The latest average credit
rating of the underlying portfolio is AAA. The daily dealing fund is used by the Investment
Manager as an alternative to holding cash. (Public)
6.19% (7.45%)
Delamare Finance FRN
1.279% 19/02/2029
Floating-rate, senior tranche of a CMBS secured by the sale and leaseback of 33 Tesco
superstores and 2 distribution centres. (Public)
1.88% (1.77%)
Income Contingent
Student Loans 14.95%
Floating-rate, junior mezzanine tranche of a portfolio comprised of income contingent
repayment student loans originally advanced by the UK Secretary of State for Education.
24/07/2058 (Public)
1.74% (2.00%)
Serenissima SPV 5.625%
30/06/2036 Fixed coupon, senior debt in an infrastructure securitisation backed by future receivables
payable to the O&M (Operations & Maintenance) contractor for an Italian road project in
North-East Italy. (Private)
1.53% (n/a)
Aria International Var.
Rate 23/06/2025
Floating-rate, senior tranche of a securitisation of invoice receivables originated by a
specialist digital recruitment platform. (Private)
1.53% (1.38%)
Project Energy from
Waste UK Var. Rate 29/11
/2041 Floating-rate, senior secured infrastructure loan funding the design, build, maintain, operate
and finance contract of a residual waste treatment facility. (Private)
1.21% (1.54%)
Hammond Var. Rate 28/10/
2025
Secured, bilateral real estate development loan backed by a combined portfolio of 2 office
assets leased to an underlying roster of global corporate tenants. (Private)
1.15% (1.39%)
Millshaw SAMS No. 1 Var. Floating-rate, single tranche of an RMBS backed by shared-appreciation mortgages. (Public)
Rate 15/06/2054
1.15% (1.43%)
Income Contingent
Student Loans 1
2002-2006 FRN 2.76% 24/
07/2056 Floating-rate, mezzanine tranche of a portfolio comprised of income-contingent repayment
student loans originally advanced by the UK Secretary of State for Education. (Public)
1.12% (1.22%)
Signet Excipients Var.
Rate 20/10/2025
Fixed-rate loan secured against 2 large commercial premises in London, currently leased to 2
FTSE listed UK corporations. (Public)
1.06% (1.27%)
Atlas 2020 1 Trust Var.
Rate 30/09/2050
Floating-rate, senior tranche of a bilateral RMBS transaction backed by a pool of Australian
equity release mortgages. (Private)
0.94% (1.19%)
Whistler Finco 1% 30/11/
2028 Floating-rate, senior secured term loan lending to an outdoor media infrastructure owner which
invests and manages a large billboard portfolio in the UK, Netherlands, Spain, Ireland and
Germany. (Private)
0.91% (1.10%)
STCHB 7 A Var. Rate 25/
04/2031 Floating-rate, mezzanine tranche in a regulated capital securitisation where the portfolio
consists of 36 loans, secured on the undrawn Limited Partner (LP) investor capital
commitments. (Private)
0.90% (1.15%)
Global Gender Smart Fund
1% 31/12/2028
Floating rate, senior tranche in a microfinance debt fund backed by DFIs (Development Finance
Institutions). (Private)
0.88% (n/a)
NewRiver REIT 3.5% 07/03
/2028
NewRiver REIT PLC operates as a real estate investment trust investing in retail properties
throughout the United Kingdom. Fixed, callable bond. Senior Unsecured. (Public)
0.87% (1.03%)
The School Board Of
Miami Dade County 1%
Fixed coupon, senior secured Private Placement note issued by a regional US school board,
supported by future payments relating to wireless spectrum licenses leased to a blue-chip
15/10/2038 tenant. (Private)
0.87% (n/a)
Fontwell II Securities
2020 9.2208% 18/12/2028
Floating-rate, mezzanine tranche in a regulated capital securitisation where the underlying
portfolio is long-term mortgages for farms and rural businesses across the UK. (Private)
0.83% (1.01%)
Finance for Residential
Social Housing PLC
8.569% 04/10/2058 High grade (AA/Aa3), fixed-rate bond backed by cash flows from housing association loans.
(Public)
0.83% (1.02%)
a Including cash on deposit and derivatives.
Further Information
The full Half Year Report and unaudited Condensed Financial Statements can be obtained from the Company's website at www.mandg.co.uk/creditincomeinvestmenttrust or by contacting the Company Secretary at mandgcredit@cm.mpms.mufg.com.
It has also been submitted in full unedited text to the Financial Conduct Authority's National Storage Mechanism and is available for inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism in accordance with DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.
For further information in relation to the Company please visit: https://www.mandg.com/investments/private-investor /en-gb/investing-with-mandg/investment-options/mandg-credit-income-investment-trust
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ISIN: GB00BFYYL325, GB00BFYYT831 Category Code: IR TIDM: MGCI LEI Code: 549300E9W63X1E5A3N24 OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews Sequence No.: 401994 EQS News ID: 2198354 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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September 17, 2025 02:00 ET (06:00 GMT)
