Absa Capital, the investment banking division of Absa Bank Ltd, announced today that it had recently acted as Sole Arranger and Bookrunner on behalf of Brandcorp (Pty) Ltd (Brandcorp) which issued a dual tranche of JSE-listed high yield bonds for a total amount of R750 million. This is the largest listed high yield bond issue in the local market to date.
Brandcorp, majority owned by Ethos Private Equity (Ethos) and management, is a large company comprising of an industrial division and a consumer goods division.
Prasanna Nana, Head of the South African Debt Capital Markets team at Absa Capital, said: “This transaction, together with our other high yield bond issuances in the South African market, further cements our position as the clear leader in the high yield bond market in South Africa.”
The issue was sold exclusively to local investors and was met with strong demand: pricing at 525bps above JIBAR on the five-year R375 million tranche, and 500bps 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,” added Nana. “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 LBO financing for the public to private buyout in August 2007 by Ethos. Nedbank provided working capital facilities and a portion of the term debt.
EndsNote 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.
Absa Capital was rated the ‘Best Primary Markets House’ in the 2009 JSE Spire Awards – one of nine first place rankings the firm secured at the awards. In addition Absa Capital was ranked #1 on the Bloomberg 2010 Underwriter Rankings league table.About Brandcorp
Brandcorp (Pty) Ltd is a large privately-owned company comprising of an industrial division and a consumer goods division. The industrial division distributes tools & hardware, engineering equipment and has a comprehensive rental fleet of specialised machinery, servicing petrochemical, mining & construction, engineering and power related industries. Products within the consumer division include homewares, travel related products and motor & outdoor accessories.
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