Absa Capital, the investment banking division of Absa Bank Ltd, announced today that it had successfully placed R750 million OntheCards II Investments (Pty) Ltd (OTC II) Class A notes in the domestic debt capital market. Leading South African retailer Edcon (Pty) Ltd's store card receivables back the notes.
This follows the successful placement of R1 billion listed and R3.4 billion unlisted notes in 2009, totalling R4.4 billion. The proceeds from the newly issued Class A notes were used to partially redeem a portion of the unlisted notes issued during 2009.
Notes with 3 and 4 year scheduled maturities were placed with domestic asset managers at competitive credit spreads thereby extending OTC II’s funding profile while also reducing the overall funding cost.
Commenting on the transaction, Steve Binnie, Chief Financial Officer of Edcon, said: “The success of this transaction once again emphasises the strong credit quality of Edcon. We believe that the South African securitisation market will continue to provide a viable funding source to Edcon going forward and we are excited about the prospects for future issuance."
This transaction further entrenches Absa Capital’s position as the top rated primary markets house* and leading arranger of debt capital market transactions in South Africa.
“This transaction builds on the number of successful securitisations arranged by Absa Capital in 2009,” said Nyagaka Ongeri, Head of Global Finance at Absa Capital.
“The transaction was subscribed for by a diverse investor base at improved credit spreads which bodes well for the securitisation market in 2010,” said Ongeri.
Rating agency Standard & Poor’s have assigned zaAAA ratings to the Class A5 and Class A6 notes and affirmed the rating of the existing Class A notes at zaAAA and Class B notes at zaA.*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
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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.Issued by:
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