Absa Capital, the investment banking division of Absa Bank Ltd, and its empowerment partner Vunani Capital, announced today the issuance of a R1.0bn BESA listed bond on behalf of the City of Cape Town Metropolitan Municipality (CCT).
Today’s announcement follows hot on the heels of similar announcements earlier this year with Absa Capital proving itself to be the preferred Lead Arranger by Bond Issuers. Notable debt issues arranged by Absa Capital in the six months to date include Development Bank of South Africa, Airports Company South Africa and Telkom Limited.
A first for the city, the new CCT bond (CCT01) has been issued under the issuer’s newly established R7.0bn Domestic Medium Term Note (DMTN) Programme and will be listed on the Bond Exchange of South Africa on 23 June 2008. The bond will have a fixed rate coupon of 12.57% p.a., payable semi-annually.
Mike Richardson, Chief Financial Officer, CCT, indicated that the city was very pleased with the high level of interest shown by the investment community in this bond.
Richardson pointed out further that funding from the domestic bond market will contribute to the diversification of the CCT’s funding sources for its capital investment plan.
“As a client of Absa since 1929, we are exceptionally proud to have arranged the CCT 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 CCT achieve its development strategy as a local government.”
Jacques Els, Head of Bonds, Hybrids and Convertibles at Absa Capital, said that there was very strong support for the bond from local institutions with the bond achieving a subscription to the extent of 297%.
“Given the CCT’s status as one of the best performing municipalities in the country there was significant credit appetite for the CCT01,” said Els.
“Absa Capital continues to aggressively pursue the position as the country’s leading debt arranger and today’s announcement underscores that commitment,” concluded Els.
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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 investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.