Absa Capital and Barclays Bank Botswana  


Absa Capital, the investment banking division of Absa Bank Ltd, in partnership with Barclays Bank Botswana today announced the single largest parastatal debt issue in the Botswana debt capital market, totaling BWP400 million, on behalf of Water Utilities Corporation (WUC). This was the second such debt issuance arranged by Absa Capital and Barclays Bank in Botswana this year. The note is scheduled to be listed on 26 June on the Botswana Stock Exchange.

Besides the size of the issuance, today’s announcement is also significant given the recent redemptions and lull in non-bank bond issuance for nearly two years.

Historically WUC has depended on loans from the Public Debt Service Fund, now Debt Participation Capital Fund, banks, and regional and international development finance institutions for funding its capital expenditure. In order to diversify its funding base and reduce its cost of borrowing, WUC mandated Absa Capital and Barclays Bank Botswana to co-lead manage the bond issue.

Favourable market and credit fundamentals led to the establishment of a BWP400 million Domestic Medium Term Note Programme, and the inaugural issue of two long term bonds: the WUC001 (maturing in 2018); and the WUC002 (maturing in 2026). 

The bonds were marketed to the domestic investment community through a comprehensive roadshow. They met with overwhelming demand in both the 10-year and 18-year area, despite competing supply just days prior to WUC coming to market.

The bonds are issued as fixed rate instruments and pay a semi-annual coupon of 10.65% and 10.60% per annum for the WUC001 and WUC002 respectively.

“Bond pricing and structure were key to the successful launch of the WUC bonds,” said Jacques Els, Head of Bonds, Convertibles and Hybrids at Absa Capital.

The favourable support for the bonds was illustrated by the high level of oversubscription on both of the WUC bonds - collectively 124% with BWP894 million in total bids received. 

Recently Absa Capital and Barclays Bank Botswana announced the successful issuance of the BWP70 million Botswana Vaccine Institute Pty Ltd (BVI) debut bond in the Botswana debt capital market as well as a BWP75 million bond for Botswana Building Society.

“This latest transaction for WUC follows the success of the BVI and Botswana Building Society deals and have cemented Absa Capital’s position as the leading arranger of debt in the Botswana debt capital market,” said Stephen van Coller, Head of Primary Markets at Absa Capital.


Note to the editor:

About  Absa Capital
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.

Water Utilities Corporation
The Water Utilities Corporation (WUC) is a corporate body wholly owned by the Government of Botswana responsible for planning, construction, operating, treating, maintaining and distributing water resources to 34% of Botswana population.

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