Absa Capital and Barclays Capital, the corporate and investment banking divisions of respectively Absa Bank Ltd and Barclays PLC, were the Joint Bookrunner and Joint Ratings Advisor on the Republic of Namibia’s (Namibia) first international bond issuance.
The country issued a 10 year bond of $500 million with a yield of 5,75% and a coupon rate of 5,5% - matching South Africa’s lowest ever USD coupon rate. The issue was 5,5x oversubscribed.
Moody’s rated the debt at Baa3 with a Stable outlook, while Fitch Ratings also rated it at BBB- with a Positive outlook. In its role as Joint Ratings Advisor, Absa Capital secured a second credit rating for Namibia (in this case from Moody’s) for the first time ever. Prior to this Namibia was only rated by Fitch Ratings.
Both these ratings are of an investment grade, representing 1 of only 3 countries rated investment grade in sub-Saharan Africa - the other two countries being Botswana and South Africa.
“This issue represents Namibia’s debt in the international capital markets and is an important step to diversifying the country’s funding sources, as well as paving the way for Namibian public and private sector issuers to have clear access to the international capital markets,” says Stephen van Coller, Chief Executive of Absa Capital.
The healthy uptake by investors is a sign of the demand for investment grade capital from sub-Saharan Africa. Approximately 75% of the final investors are US and UK institutions and the remainder went to investors from Europe, the Middle East, Asia and Africa.
“The success of this transaction is further testament to the strong working relationship between the Barclays Capital and Absa Capital franchises. With this transaction, Barclays Capital and Absa Capital retained the first position in sub-Saharan African issuance in the year-to-date,” says van Coller.
Earlier this year Barclays Capital acted as advisor to the Federal Republic of Nigeria on its inaugural international bond transaction. The bond, which priced on 21 January 2011, marked the first issuance by a sub-Saharan African sovereign in 2011.
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About Absa Capital
Absa Capital, a division of Absa Bank Limited (Absa) and affiliated to Barclays Capital, is a leading South African corporate and investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.
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