Absa Capital, the investment banking division of Absa Bank Ltd, acting as Sole Lead Arranger, raised R2.5bn for BMW Financial Services (South Africa) (Pty) Ltd in their inaugural bond issue on June 15, 2010. This capital raising exercise marks the largest listed bond issue in the South African debt capital markets since October 2008.
BMW Financial Services SA issued three bonds guaranteed by BMW AG - rated zaAA+ by Standard & Poors - in the 1-year, 2-year and 3-year maturities through an auction that was 2.1 times oversubscribed.
A total of 20 investors bid for notes in the auction, resulting in significant demand and favourable pricing across the three tranches. The pricing achieved by BMW SA is highly attractive for the BMW Group as funding was raised at levels inside the current BMW Euro bond levels.
The ZAR bond market provided the BMW Group with diversification to its existing global funding base and access to the top South African investors.
Prasanna Nana, Head of the South African Debt Capital Markets team at Absa Capital, said: “We are extremely pleased to have raised these funds for BMW Financial Services SA.”
“The positive response from the market was overwhelming, bearing testament to the high demand for strong credits such as BMW,” said Nana.
The competitive pricing achieved by BMW Financial Services SA is further evidence of the resilience of the South African market to global market volatility.
This transaction led by Absa Capital, with support from Barclays Capital, and working together with BMW AG and BMW Financial Services SA, highlights yet again what can be achieved by a fully local and fully global investment bank.
Absa Capital through Barclays Capital was also able to garner international investor interest in the domestic issuance.
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 November 2009 JSE Spire Awards – one of nine first place rankings the firm secured at the awards.
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