VENTURES AFRICA – African Bank (a wholly-owned subsidiary of African Bank Investment Limited) has successfully issued two local bonds valued over R1 billion ($112 million) under its Domestic Medium Term Note (DMTN) programme, designated to be used for general funding purposes.
The first bond is an inflation linked note, to the value of R800 million ($89.7 million) that was initiated as a result of a reverse enquiry from several investors.
The bond (ABLI05) has an annual coupon of the South African consumer inflation rate (CPI) plus 3.2% and will mature in February 2018.
The second bond, a six month unsecured floating rate note valued at R250 million ($22.3 million), was issued following the maturity of the ABLC07 note on 15 February 2013.
Set to mature in August 2013, the new floating rate note (ABLC08) has a coupon of 3 month JIBAR plus a margin of 40 bps per annum. The issue was substantially oversubscribed.
Gavin Jones, an executive of Funding and Liability Management, commented: “We are pleased that the South African debt funders continue to demonstrate their confidence and support for African Bank’s credit. Domestic funding margins have remained consistent to margins experienced toward the end of 2012.
On the foreign market, secondary market spreads have continued to tighten after an initial widening immediately after ABIL’s SENS announcement on the 7 February, concerning the NCR probe into African Bank. This bodes well for the Bank as it continues to grow its funding relationships in the global space.”