Absa Capital Arranges Largest Listed High-yield Bond
Absa Capital, the investment banking division of Absa Bank, announced on Monday it has arranged the largest listed high-yield bond ever issued in the local market worth R750 million.
This comes after it recently acted as sole arranger and bookrunner on behalf of Brandcorp, which issued a dual tranche of JSE-listed high-yield bonds for a total amount of R750 million.
The issue was sold exclusively to local investors and was met with strong demand: pricing at 525 basis points above the Johannesburg interbank agreed rate (JIBAR) on the five-year R375 million tranche, and 500 basis points above JIBAR on the four-year R375 million tranche.
"While the domestic high-yield bond market is still relatively new, we continue to see interest for unrated issuance," said Prasanna Nana, head of the South African Debt Capital Markets team at Absa Capital.
"This transaction was well received by local investors, reflecting the continued development of the high-yield bond market in South Africa."
Absa Capital has a long-standing relationship with Brandcorp and underwrote the leveraged buy-out financing for the public to private buyout in August 2007 by Ethos.
Nedbank provided working capital facilities and a portion of the term debt.
Brandcorp, majority-owned by Ethos Private Equity (Ethos) and management, is a company comprising of an industrial division and a consumer goods division.