Absa Capital, the investment banking division of Absa Bank Ltd, announced today the inaugural debt capital market issuance by Eqstra Corporation (Pty) Ltd (Eqstra Corp) a wholly-owned subsidiary of Eqstra Holdings Limited (Eqstra).
Eqstra is a diversified, leasing, industrial, construction and mining equipment importer and distributor, as well as being the largest opencast hard rock contract miner and plant hire company in South Africa. The company was listed on the JSE Limited on the 12th of May this year. Eqstra currently avails of committed banking lines totaling R6.9bn of which R4.8bn has been drawn down.
The first Commercial Paper issuance for Eqstra Corp, the 1 month EQ001U (R250 million) and 3 month EQ002U (R500 million) notes have been issued under the issuer’s newly established BESA listed R8bn Domestic Medium Term Note (DMTN) Programme. The notes are scheduled to settle on 14 July 2008. The yields on the EQ001 and EQ002 are 12.53% and 12.925% respectively.
Walter Hill, Chief Executive Officer of Eqstra indicated that the issue was met with a great level of enthusiasm by the local investor community.
The high level of interest shown in these Commercial Paper issues was reflected by the 179% subscription level achieved on the issue and bodes well for future Eqstra debt capital market funding initiatives. Hill also indicated that the DMTN Programme and this inaugural debt capital market issuance will serve to diversify Eqstra funding sources.
We are exceptionally pleased to have acted as joint lead arrangers on the Eqstra DMTN Programme and its first venture into the listed debt capital markets,” said Stephen van Coller, Head of Primary Markets at Absa Capital. “Through this issuance we’re proud to assist Eqstra to achieve its optimal funding structure.”
This deal follows the announcement of debt issues arranged by Absa Capital in past eight months including Transnet, Development Bank of South Africa, Airports Company South Africa, Telkom, City of Cape Town and Mercedes Benz South Africa.
Absa Capital is proving itself to be the preferred lead arranger by debt capital market issuers.
“Absa Capital continues to aggressively pursue the position as the country’s leading debt arranger and today’s announcement underscores that commitment,” concluded Jacques Els, Head of Bonds, Convertibles and Hybrids at Absa Capital.
Absa Capital and Nedbank Capital acted as Joint Lead Arrangers on the DMTN Programme and as joint bookrunners for the Commercial Paper Issue.
Note to the editor:
Absa Capital, a division of Absa Bank Limited (Absa) and affiliated to Barclays Capital, is a leading South African investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.