| Tue 1 Sep 2009, 16:03 | | ABL / ABLP - African Bank Raises R100 Million Subordinated Tier II Capital |
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ABL ABLP
ABL
ABL / ABLP - African Bank Raises R100 Million, Subordinated Tier II Capital
from Proparco
African Bank Investments Limited
(Registration Number 1946/021193/06)
(Incorporated in the Republic of South Africa)
(Registered bank controlling company)
Ordinary Share Code: ABL & ISIN: ZAE000030060
Preference Share Code: ABLP & ISIN: ZAE000065215
("ABIL")
AFRICAN BANK RAISES R100 MILLION, SUBORDINATED TIER II CAPITAL FROM PROPARCO
African Bank Limited ("African Bank"), a wholly-owned subsidiary of African Bank
Investments Limited, is pleased to announce that it has raised a R100 million
subordinated Tier II capital qualifying loan from Proparco.
Proparco is a French Development Financial Institution partly held by Agence
Francaise de Developpement and private shareholders. Its mission is to be a
catalyst for private investment in developing countries which targets growth,
sustainable development and reaching the Millennium Development Goals (MDGs).
Proparco finances operations which are economically viable, socially equitable,
environmentally sustainable and financially profitable.
The subordinated debt instrument, which has a final maturity of 12 years, is
callable by African Bank after 7 years. The pricing of the loan for the initial
7 year non-callable period, after being fully hedged via a cross currency swap,
translates into 3mth JIBAR plus 578bps. In line with its existing risk
management strategy, African Bank has hedged this floating rate exposure, via an
interest rate swap, resulting in an effective 14.4% nacq fixed rate for the
duration of the loan.
African Bank provides its clients, who are largely in the low-middle-income
market, with unsecured credit, approximately 50% of which is applied towards
incremental housing and education related purposes. As such, Proparco`s loan
will facilitate deeper access for African Bank`s clients to incremental housing
and education related loans.
Sophie Le Roy, Regional Representative of Proparco for Southern Africa, said
"Proparco`s purpose in this transaction is to improve access to financial
services to more people in spite of the global financial crisis and the
recession that hit South Africa. This Tier II funding will enhance African
Bank`s capital, facilitating further growth in its book."
Leon Kirkinis, ABIL CEO, said "This transaction is the second investment by
development institutions into African Bank, bringing the total to R450 million
and is an extension of African Bank`s long-term capital management and funding
programme, which aims to optimise the weighted average cost of capital of the
Bank, and widen our universe of funders".
For further information please contact Nga Kugotsi on (011) 256 9242.
Midrand
1 September 2009
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 01/09/2009 16:03:01 Produced by the JSE SENS Department.
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