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Absa Capital executes Savcio’s first local high yield bond issuance  

 12/7/2009 
  • Absa Capital successfully executes the inaugural domestic high yield bond issue for Savcio Holdings (Pty) Ltd (“Savcio”)
  • Transaction demonstrates the value of innovative thinking in rejuvenating the high yield market
Absa Capital, the investment banking division of Absa Bank Ltd, announced today that it had executed Savcio’s first high yield corporate bond issuance as part of that company’s domestic medium term note programme

The bonds were issued from Savcio’s domestic medium term note programme, which is listed on the bond market of the JSE, and provides a fillip for high yield corporate bond issuance in South Africa.

Bevan Hitchcock, Deputy CEO of Savcio, said: “We are excited we were able to raise the funding at competitive rates in the local debt capital markets which we see as a viable future source of liquidity.”

“The funds were used to partially fund the buy-back of our Euro denominated notes which were tendered on 1 December 2009.”

The Savcio bond issuance locally, and tender of the Euro denominated bonds, was a joint and simultaneous effort between Absa Capital and Barclays Capital - Absa Capital’s global affiliate.

Commenting on the joint and simultaneous effort, Nyagaka Ongeri, Head of Global Finance at Absa Capital said that it underscores what can be achieved by a fully local, fully global investment bank.

Further the transaction demonstrates the value of innovative thinking in rejuvenating the high yield market.

“Absa Capital has executed numerous innovative transactions from various asset classes this year in challenging market conditions,” said Ongeri.

“The bonds were oversubscribed, which is very encouraging as the South African high yield corporate bond market has been slow to take off,” said Clinton Clarke, Head of Fixed Income Sales at Absa Capital.

According to Clarke the deal indicates that investors have a strong appetite for good quality, non-investment grade issuers and could pave the way for more high yield issuance.

Simon Howie, Senior Portfolio Manager at Investec Asset Management said: “We were delighted to have played such an active role as the lead investor in this innovative transaction and are excited about the future prospects for the high yield market in South Africa.”

This latest high yield bond issuance further cements Absa Capital’s position as the top rated primary markets house* and leading arranger of debt capital market transactions in South Africa

*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.

Ends

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.

Issued by:
FD Media and Investor Relations

Grant Henry
+27 11 214 2406
+27 82 561 7172
Grant.Henry@fd.com

For further information contact:
Graeme Coetzee
Associate Principal
Marketing and Corporate Communications
Absa Capital
+27 11 895 6695
+27 79 695 9798
graeme.coetzee@absacapital.com
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