Absa Capital, the investment banking division of Absa Bank (Ltd), has successfully raised R2.358 billon for the Absa Homes Retail Mortgage Backed Securities (RMBS) securitisation - the largest securitisation deal in South Africa since November 2007.
Absa Capital raised the funds through the issuance of a combination of three-year (R1.869 billion) and five-year (R489 million) listed notes. The deal was oversubscribed and priced within price guidance.
“This transaction, together with our Nqaba and Edcon securitisation deals earlier this year, adds impetus to the strong recovery of the securitisation market,” said Prasanna Nana, Head of the South African Debt Capital Markets team at Absa Capital.
This deal is Absa Capital’s fourth securitisation deal of 2010, having recently raised funds for Eskom Finance Company through a residential mortgage backed securitisation and twice for Edcon (Pty) Ltd through the On-The-Cards II structure which is backed by store card receivables.
No other securitisation deals have been done in South Africa so far this year, underlining Absa Capital’s dominant position in the local debt capital market.
Absa Homes had R1.25 billion of notes maturing on 19 July. The maturity date was extended to 19 August 2010 to allow Fitch to assess the transaction under its revised RMBS rating methodology and affirm the rating of the notes. Rating affirmation is required for redemption and re-financing of the notes.
On 17 August Absa Capital successfully re-financed the maturing notes as well as sourced new financing resulting in a total issue size of R2.358 billion.
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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.
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