DJ Annual Financial Report
M&G Credit Income Investment Trust plc (MGCI)
Annual Financial Report
30-March-2026 / 07:00 GMT/BST
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LEI: 549300E9W63X1E5A3N24
M&G CREDIT INCOME INVESTMENT TRUST PLC
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2025
AND
NOTICE OF ANNUAL GENERAL MEETING
M&G Credit Income Investment Trust plc announces its annual results for the year ended 31 December 2025 and the
publication of its annual report and accounts for the same period, which includes the notice of Annual General Meeting.
Chairman's statement
"Investor demand enabled your Company to issue 58.6 million Ordinary Shares between 1 January 2025 and 28 February
2026. We have subsequently resumed buybacks to protect the share price following the outbreak of war in the Middle
East. The portfolio has proved extremely resilient and is well placed to benefit from future volatility."
Performance
Your Company's opening NAV on 1 January 2025 (adjusted for the last dividend for 2024) was 93.02p per Ordinary Share
and its NAV on 31 December 2025 (adjusted for the last dividend for 2025) was 91.06p per Ordinary Share. Including
dividends paid, the NAV total return for the year to 31 December 2025 was 6.21%, compared to our benchmark return of
8.54%.
The Investment Manager kept the portfolio defensively positioned throughout the year as it continues to believe (as it
has for some time now), that credit spreads are not compensating investors for longer term corporate risk. Adding risk
when it is expensive can significantly erode long-term portfolio gains. Your board supports the Investment Manager's
stance that it is essential to resist over-exuberance and herd mentality, focusing instead on credit fundamentals and
rational, long-term value. In the short-term this strategic decision has seen portfolio activity concentrate on
improving credit quality rather than chasing yield, which has contributed to underperformance relative to the SONIA+4%
pa benchmark.
The Company's NAV total return underperformed when compared with investment grade indices such as the ICE BofA Sterling
Corporate and Collateralised Index (+7.10%) and the ICE BofA 1-3 Year BBB Sterling Corporate & Collateralized Index
(+6.72%), whilst outperforming the ICE BofA European Currency Non-Financial High Yield 2% Constrained Index (+5.54%).
(Please note: the Company's NAV total return is calculated net of fees: on a gross basis the Company's portfolio
delivered higher returns than each of these comparable indices.)
Your Company's portfolio (including irrevocable commitments) at year end was 46% invested in private (not listed)
assets, with an additional approximately 8% invested in illiquid publicly listed assets which are intended to be held
to maturity. The reduction in the private asset portion of the portfolio (as compared with 52% prior year-end) was
driven by our share issuance outpacing private asset deployment. The Investment Manager was pleased with the diverse
range of opportunities it saw during the year and expects to continue to grow the private asset portion of the
portfolio over time, in line with the Company's strategy. Having the flexibility to invest across all areas of the
fixed income market is important to achieve the most attractive risk-adjusted returns for shareholders.
Share issues and discount management
During the year, your Company increased its market capitalisation by GBP47.75 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 also underpins our Zero Discount Policy
which seeks to ensure that Ordinary Shares trade close to NAV in normal market conditions.
Investor demand for new Ordinary Shares over the year was so great that it exceeded the authorities granted at the
prior AGM. Accordingly, the board convened two additional general meetings during the year at which the necessary
issuance authorities were renewed. The Company was also required to publish a new prospectus.
In March, the Company issued 6,647,969 new Ordinary Shares via a placing and retail offer, whilst an additional 46.1
million new Ordinary Shares were sold through follow-on tap issues over the period to 31 December 2025.
In accordance with the Board's policy, issues of Ordinary Shares were made at prices not less than the then prevailing
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 1.9% during the year ended 31 December 2025.
On 31 December 2025 the Ordinary Share price was 95.0p, representing a 2.2% premium to NAV as at that date. Issuance
continued during January and February 2026, during which a further 5,850,000 Ordinary Shares were issued. Following the
commencement of war against Iran and the consequent market turmoil, the Ordinary Share price moved to a discount and
your Company recommenced its buyback programme in order to honour the Zero Discount Policy. 250,000 Ordinary Shares
have been repurchased as at 27 March 2026.
NAV Total Return and Dividends
While the SONIA + 4% benchmark provides a consistent reference point for assessing NAV total return, it has been rarely
achieved by the Company in recent years. This reflects both the prevailing market environment and the Company's
investment approach, which prioritises income generation and lower asset value volatility over the pursuit of
benchmark-matching total returns in all conditions.
Your Company paid four, quarterly interim dividends in respect of the year ended 31 December 2025 at the target annual
rate of SONIA plus 4%, calculated by reference to the adjusted opening NAV as at 1 January 2025. These totalled 7.62p
per Ordinary Share, which represented a trailing dividend yield of 8.02% on the Ordinary Share price as at 31 December
2025. Dividends paid exceeded the Company's NAV total return, resulting in a small diminution in the NAV over the year.
This outcome reflects the mechanics of the Company's dividend target. The Board's policy is to distribute an annual
dividend equivalent to SONIA plus 4%, calculated on the adjusted opening NAV. For 2025, this target translated into
total dividends of 7.62p per Ordinary Share. While the portfolio generated a solid NAV total return of 6.21% for the
year, this was modestly below the dividend target. As a result, the dividend distribution exceeded the total return
generated, leading to a small reduction in the Company's NAV over the period. This dynamic is consistent with the
Company's policy, which allows dividends to be paid from capital when appropriate.
Board changes
Three of your directors have served on the board since the Company's IPO in 2018 and we wish to ensure an orderly
change over the next two years as we each approach our nine-year term limit. As a result, Barbara Powley has decided
not to seek re-election at the AGM in May. She will be sorely missed.
I am delighted, however, to say that Christiane Elsenbach joined the board on 26 February 2026. She spent her executive
career in structured finance and private credit and serves on several charity boards. I encourage shareholders to come
to our AGM, where you will be able to meet her as well as the rest of your board and your portfolio manager.
Barbara Powley's role as Senior Independent Director will be assumed by Jane Routledge, and her role as chair of the
Management Engagement Committee will be assumed by Richard Boléat.
Outlook
Markets have been volatile in the past weeks, driven by the Iran conflict, wider geopolitical concerns, the
artificial-Intelligence related sell-off in software companies and adverse news around private credit in the US.
Perhaps surprisingly, we have not yet seen a sell-off in public credit; and the Company's portfolio has been insulated
by its low duration from the effects of interest rate volatility.
The overall portfolio maintains a solid investment-grade profile with only approximately 20% in high-yield credit. The
private portion of the portfolio has no direct software exposure, and software-related holdings across the remainder of
the portfolio represent less than 2% of the portfolio. The portfolio continues to be invested principally in Europe and
the UK with only a small exposure to the US. Recent events are expected to have had an immaterial impact upon the value
of the Company's portfolio.
Under these market conditions, and where credit valuations remain stretched, the Investment Manager believes it is more
important than ever to maintain a patient and disciplined investment approach. The portfolio is shaped to be a net
beneficiary of any future credit spread widening and market volatility and, while this may mean foregoing portfolio
greater returns in the short term, in the Investment Manager's opinion it is fundamental to driving strong performance
over a longer term investment horizon. Should further market volatility give rise to attractive opportunities, we have
access to a GBP40 million credit facility and a further GBP40 million invested in daily dealing ABS funds of AAA/AA
underlying credit quality, which is ready to be reallocated.
David Simpson
Chairman
27 March 2026
Financial highlights
Key data
As at As at
31 December 31 December
2025 2024
Net assets (GBP'000) 185,767 139,995
Net asset value (NAV) per Ordinary Share 92.91p 95.11p
Ordinary Share price (mid-market) 95.0p 96.6p
Premium to NAVa 2.2% 1.6%
Ongoing charges figurea 1.18% 1.28%
Return and dividends per Ordinary Share
Year ended Year ended
31 December 31 December
2025 2024
Capital return 0.6p 1.5p
Revenue return 5.3p 6.0p
NAV total returna 6.2% 8.1%
Share price total returna 6.7% 14.6%
Total dividends declaredb 7.62p 8.53p
a Alternative performance measure. Further information can be found on pages 117 to 118 of the full Annual Report and Accounts.
b The total dividends declared in respect of each financial year equated to a dividend yield of SONIA +4% on the adjusted opening NAV.
Investment manager's report
Market review
Early 2025 was marked by significant volatility and geopolitical uncertainty, driven primarily by the Trump administration's aggressive trade policies. On 2 April, the 'Liberation Day' tariff announcement imposed a 10% baseline tariff on all imports, leading to fears of a global recession and a widening in credit spreads. This window of opportunity to add risk at what we considered more attractive levels was short lived, with tariffs temporarily suspended to allow for bilateral negotiations, which saw credit spreads retrace entirely. Economic growth slowed considerably, reflecting the impact of uncertain global trade policies and fluctuating market conditions. In another notable deviation from traditional policy, Germany announced an historic fiscal package and debt brake change to allow for higher defence and infrastructure spending.
The latter part of the year was largely positive for financial markets. Global stock markets continued to recover from the tariff-induced sell-off as trade tensions subsided, with gains also fuelled by strong corporate earnings, anticipation of Federal Reserve rate cuts, and continued enthusiasm around Artificial Intelligence (AI) and technology innovation. Despite the dramatic shift in trade relations, US growth remained resilient, with tariff-related inflation largely failing to materialise. Longer-term structural obstacles to growth continued to persist in the UK and Europe. Inflation generally cooled across the US, Europe, and UK from post-pandemic highs, driven by falling energy costs and slower goods price increases, though services inflation remained sticky. This allowed central banks to cut interest rates to varying degrees. Policy rate decisions from the Bank of England and Federal Reserve proved to be contested as inflation in the UK and US remained uncomfortably above targets. In spite of macro headwinds, sentiment was constructive to end the year, anchored by expectations of continued policy support and a gradual normalisation of inflation.
Despite the temporary, tariff-induced weakness, both investment grade and high yield credit spreads tightened meaningfully over the course of the year and the technical backdrop in fixed income remained robust. A combination of relatively high bond yields, a benign outlook for inflation, and the likelihood of lower interest rates remained appealing to both income and total return investors. As a result, demand for corporate bonds significantly exceeded supply, which kept volatility contained and credit spreads well-anchored with a bias to tightening.
Portfolio positioning
We entered the year defensively positioned (as we have been for some time on relative value concerns), and our primary focus remained on deploying capital into private assets, investing approximately GBP28 million across 20 new and existing facilities during the period. We continued to find attractive relative value in Regulatory Capital transactions and 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: Infrastructure and Private Placements. Other private transactions saw us allocate additional capital to existing securitisations in the portfolio and transact on a number of Direct Lending opportunities across a broad range of underlying sectors, including air pollution control, hospitality, and packaging solutions. As the Company raised capital via the issue of new Ordinary Shares (as detailed in the Chairman's Statement), we invested proceeds into the M&G European Loan Fund, a cornerstone investment of the portfolio since launch, as well as the M&G Investment Grade ABS Fund, which has an underlying credit quality of AA. In the public market, we invested selectively in new issues where there was still what we considered to be a 'decent' credit spread on offer within the context of very expensive credit markets. Often, what we considered to be more attractive relative value was found by identifying expected survivors in embattled sectors such as UK water (SWS Finance), EU chemicals (Ineos), and Autos (Ford).
We prudently monitor the portfolio for signs of credit stress and have independent internal committees that oversee and approve amendments to private asset pricing where the credit profile of an investment may have changed. During the year, there were valuation adjustments to loans from two different private issuers as a result of internal credit rating downgrades, which are reflected in the Company's latest published NAV. The portfolio currently has exposure to three issuers, amounting to 0.57% 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.
Outlook
The war in Iran represents the biggest risk to global supply chains since the Covid 19 pandemic, injecting a new and potentially long lasting shock into the global economy and creating heightened volatility in financial markets. Most global equity markets are either flirting with or have breached technical correction territory, however we have not yet seen a sell off in credit. Oil and natural gas prices have borne the brunt of price action, spiking drastically, with the inflationary implications causing a rout in government bond markets - at the time of writing UK 5-year gilts have just reached their highest level since 2008. Given the portfolio's low duration, it has been well-insulated from the direct effects of this interest rate volatility. History suggests that geopolitical shocks very rarely leave a lasting dent on asset prices and are generally followed by rapid market recoveries, which perhaps explains the market's rather sanguine outlook. By comparison, the sell off in both equity and credit post Liberation Day was far sharper and more panicked. In fact, investors have begun to behave as though the war is already approaching its end, despite there being no diplomatic agreement in sight. Equity and credit markets are currently pricing in a short conflict, which makes them particularly vulnerable to a longer term conflict that could trigger a major stagflationary shock.
Some of the current market volatility can also be attributed to concerns about private credit. Sectors with a high percentage of intangible assets have been selling off, driven by fears of Artificial Intelligence ('AI') as a disruptive technology-particularly in software-with credit and loan markets now demanding a risk premium for issuers perceived as being particularly vulnerable. Much of the volatility has been focussed on the US sub investment grade loan market. The majority of our portfolio is held in investment grade quality assets and continues to be invested principally in Europe and the UK, with only a small exposure to the US. The private portion of our portfolio has no direct software exposure, and software related holdings across the remainder of the portfolio represent less than 2% of portfolio value, including the indirect exposure via the M&G European Loan Fund. It is worth noting that credit opportunities frequently arise from sector specific cycles, even within broader economic expansions or periods of stability. For example, during the Commercial Real Estate Cycle (2022-2024), we achieved notable capital gains by investing in heavily discounted REIT debt when shifts in post Covid working trends caused distress in certain property types. Consequently, we view sector-specific weaknesses as potentially offering compelling opportunities to increase portfolio exposure at valuations significantly more attractive than those observed in the recent past.
Despite the global macro volatility and heightened risk environment, credit spreads remain anchored and still screen as expensive when viewed through an historical lens. Investors certainly are not being compensated for the myriad short and medium term uncertainties they must consider, or for the plausible scenario of a sustained energy supply disruption. Given the current market backdrop, we feel it is pertinent to re emphasise once again our investment approach: we allocate capital based on our assessment of relative value, backed by fundamental credit research and in depth analysis provided by a team of over 100 analysts. When we view credit as expensive (ie, spreads are tight-as they remain now), we position the portfolio to be a net beneficiary of any future credit spread widening or market volatility by maintaining a cautious stance and improving overall credit quality. We then remain patient and disciplined as we wait for attractive entry points to take on additional credit risk, which typically occur during periods of macro driven market volatility where dislocations emerge between credit fundamentals and valuations. This strategy has historically benefited portfolio performance. We currently have a significant amount of capital invested in AAA/AA ABS funds ready to be reallocated, as well as a GBP40 million credit facility, should this period of heightened volatility provide opportunities to add risk and enhance portfolio yield.
M&G Alternatives Investment Management Limited
27 March 2026
Portfolio analysis
Geographical exposure
Percentage of portfolio of investments
as at 31 December 2025 (2024)*
Percentage of portfolio of investments Europe 52.43% (41.80%) United Kingdom 40.67% (50.90%) United States 5.56% (4.24%) Asia-Pacific 0.88% (1.97%) Global 0.46% (1.09%)
* Excluding cash on deposit and derivatives.
Source: M&G and State Street as at 31 December 2025
Portfolio overview
As at 31 December 2025 2024
% %
Cash on deposit 3.00 0.97
Public 50.40 46.57
Asset-backed securities 12.42 24.62
Bonds 14.10 14.50
Investment funds 23.88 7.45
Private 46.42 52.38
Asset-backed securities 2.34 4.57
Bonds 1.37 2.06
Equities 0.01 -
Investment funds 13.52 11.40
Loans 16.26 23.06
Private placements 1.24 1.25
Subordinated debt 0.08 -
Other 11.60 10.04
Derivatives 0.18 0.08
Debt derivatives - 0.05
Forwards 0.18 0.03
Total 100.00 100.00
Source: State Street
Credit rating breakdown
As at 31 December 2025 2024
% %
Unrated 0.27 0.08
Cash and investment grade 78.80 76.40
Sub-investment grade 20.93 23.52
Total 100.00 100.00
Source: State Street
For the detailed breakdown of the credit ratings of the investment portfolio, please refer to page 103 of the full Annual Report and Accounts in note 13 to the Financial Statements.
Top 20 holdings
Percentage of portfolio
of investmentsa
Company description
As at 31 December 2025
(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)
18.34% (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)
13.52% (11.40%)
M&G Senior Asset Backed Open-ended fund managed by M&G investing in a diversified pool of investment grade ABS. In
Credit Fund usual market conditions, the fund will invest predominantly in senior tranches of ABS, with
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)
5.54% (7.45%)
Delamare Finance FRN Floating-rate, senior tranche of a CMBS secured by the sale and leaseback of 33 Tesco
1.279% 19/02/2029 superstores and 2 distribution centres. (Public)
2.45% (1.77%)
Income Contingent Floating-rate, junior mezzanine tranche of a portfolio comprised of income contingent
Student Loans 14.95% 24/ repayment student loans originally advanced by the UK Secretary of State for Education.
07/2058 (Public)
1.53% (2.00%)
Salisbury III Securities Floating-rate, mezzanine tranche in a regulated capital securitisation where the underlying
FRN 1% 16/06/2027 portfolio is a diversified portfolio of UK small and
1.49% (0.93%) medium enterprise ('SME') loans originated by Lloyds Bank. (Private)
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)
1.38% (n/a)
Totem Aries-7M
Incorporated Cell 3.5%
27/01/2034 Floating-rate, mezzanine tranche in a regulated capital securitisation where the underlying
portfolio is Asset Backed Lending and Super Senior Facilities to US corporates. (Private)
1.06% (n/a)
Ford Motor Credit 6.184% Fixed-rate bond issued by Ford Motor Credit Company LLC providing automotive financing
29/08/2031 services through Ford and Lincoln dealerships.
1.05% (n/a) (Public)
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)
1.04% (1.54%)
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)
0.98% (1.22%)
Millshaw SAMS No. 1 Var.
Rate 15/06/2054
Floating-rate, single tranche of an RMBS backed by shared-appreciation mortgages. (Public)
0.94% (1.43%)
Signet Excipients Var.
Rate 28/11/2026
Fixed-rate loan secured against 2 large commercial premises in London, currently leased to 2
FTSE listed UK corporations. (Public)
0.93% (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)
0.85% (1.19%)
Global Gender Smart Fund
1% 31/12/2028
Floating rate, senior tranche in a microfinance debt fund backed by DFIs (Development Finance
Institutions). (Private)
0.82% (n/a)
Whistler Finco 1% 30/11/ Floating-rate, senior secured term loan lending to an outdoor media infrastructure owner which
2028 invests and manages a large billboard portfolio in the UK, Netherlands, Spain, Ireland and
Germany. (Private)
0.82% (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)
0.81% (1.15%)
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)
0.78% (1.03%)
The School Board Of
Miami Dade County 1% 15/
10/2038 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
tenant. (Private)
0.78% (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)
0.74% (1.01%)
a Including cash on
deposit and derivatives.
Annual General Meeting
The Company's Annual General Meeting will be held at the offices of M&G Alternatives Investment Management Limited, 10 Fenchurch Avenue, London EC3M 5AG at 9:30am on Wednesday, 20 May 2026. The formal Notice of AGM can be found within the Annual Report.
Further Information
The full Annual Report and Accounts 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.
A copy of the Annual Report and Accounts will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at: https://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.
ENDS
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.
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