Absa Capital, the investment banking division of Absa Bank Ltd, announced today that it had raised R1.0bn for Edcon (Pty) Ltd in the largest securitisation deal in the South African market since August 2008.
Absa Capital and Edcon raised the funds through the issuance of a combination of one-year (R445m) and three-year (R555m) asset backed securitised Bond Exchange of South Africa (BESA) listed notes. The deal was oversubscribed.
The notes were issued through the ‘On-The-Cards II’ structure and are backed by a portion of Edcon’s store card receivables.
Jacques Els, Head of Debt Capital Markets at Absa Capital, said the transaction proved that the local securitisation market was coming back to life - evidenced by the fact that 12 different investors participated in this landmark deal.
“The strong interest from a diverse investor base bears testimony to investors’ positive view of the strong credit quality of both Edcon as a company, as well as the underlying asset pool,” said Steve Binnie, Chief Financial Officer of Edcon.
This deal is Absa Capital’s third securitisation deal of 2009 having recently raised R784m for Eskom Finance Company, through a residential mortgage backed securitisation, and a further R150m for Vukile Investment Property Securitisation, via a commercial mortgage backed securitization.
“Outside of Eskom Finance Company, Vukile Investment Property Securitisation and now Edcon, no other securitisation deals have been done in South Africa so far this year,” said Stephen van Coller, Deputy CEO of Absa Capital. “Today’s announcement further enhances Absa Capital’s reputation as the leader in the local debt capital market.”
Rating agency Standard & Poor’s have assigned zaAAA ratings to all 4 tranches of the Edcon notes in this transaction.
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:
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