The corporate and investment banking division of Absa Bank Limited, a member of Barclays, has raised US$1-billion for state-owned power utility Eskom through a 10-year bond offering. Absa acted as a joint-lead arranger.
The transaction, which closed earlier this month, achieved $4-billion in investor demand and represented Eskom’s second US-dollar issuance since it embarked on its major expansion drive in 2004. Absa is the only institution to have acted as joint-lead manager on both Eskom’s issuances.
This month’s issuance followed a five-day roadshow covering investors in London, Los Angeles, Boston, and New York. As part of the transaction, Eskom established a $4bn 144a/Reg S GMTN programme. Eskom was able to navigate the market carefully and ultimately issue in the strongest market seen since the recent volatility, and ahead of key economic data and the summer slow-down.
Jacki Collins, Director: Emerging Markets Debt Capital Markets at Barclays, said Eskom achieved a high quality and diverse order book (both in terms of geography and investor type) of just over US$4bn. Over 225 investors were involved, many of which were present in Eskom’s original transaction.
“We are delighted to have successfully taken Eskom to the international capital markets for the second time in two years. The success of this transaction is an indication of international investor confidence in Eskom. Absa has a strong relationship with Eskom given our long track record of advisory, ratings, risk management and financing mandates,” said Collins.
Prasanna Nana, Head of Debt Capital Markets at Absa, added: “Our involvement in a number of transactions in the international debt capital markets demonstrates Absa’s capabilities to successfully facilitate complicated transactions of this nature. We are proving that we have the required expertise and capacity to help corporate as well as sovereign entities to raise debt in international capital markets.”
“The strength of our relationship is also underscored by the fact that Absa was the only institution on Eskom’s previous US-dollar bond transaction to be mandated again for the establishment of Eskom’s GMTN programme and US-dollar transaction,” said Nana.
The latest deal again demonstrates the seamless teamwork across Barclays and Absa in both London and Johannesburg.
Absa conducted the fundraising in conjunction with their empowerment partner.
Note to the editor:
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