| Thu 6 May 2010, 14:00 | | KEL - Kelly Group Limited - Implementation of a long-term debtors |
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KEL
KEL
KEL - Kelly Group Limited - Implementation of a long-term debtors
securitisation funding programme
KELLY GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1999/026249/06
Share code: KEL
ISIN: ZAE000093373
("the Kelly Group" or "the Company")
IMPLEMENTATION OF A LONG-TERM DEBTORS SECURITISATION FUNDING PROGRAMME
1. INTRODUCTION
The Company`s sponsor, Rand Merchant Bank, a division of FirstRand Bank
Limited, is authorised to announce that the Kelly Group has entered into a
long-term debtors` securitisation funding programme ("the Programme`). In
terms of this Programme, the Kelly Group has raised R120 million from
Investec Bank acting through its division, Investec Capital Markets
("Investec Capital Markets"), for a renewable period of three years.
2. RATIONALE
With the Company`s existing term funding scheduled for maturity on April 30,
2010, the Company`s board resolved to replace the maturing funding
arrangement with an updated and extended funding transaction. After
considering similar funding proposals from various potential funders, the
company has opted to implement an updated debtors` securitisation funding
transaction as its primary source of debt. This arrangement has proved an
efficient means of securing long term funding for the Kelly Group, and its
staff and advisors have accumulated significant experience in managing the
Company`s funding on this basis.
Having established a track record over the last nine years, and with a
strongly performing debtors` book, the decision to update and extend the
current transaction was considered the most appropriate means of optimising
the Kelly Group`s strong cash flows and experienced debtor management. By
issuing listed rated debentures to Investec Capital Markets, the Company has
been able to secure its anticipated funding requirements for the next three
years at competitive rates based on the strength of its debtors` book, and to
establish a new long-term funding structure with Investec Capital Markets.
3. THE PROGRAMME IN SUMMARY
3.1 Pursuant to the Programme, the Kelly Group (including certain subsidiary
entities) has sold its trade debtors to an independently owned special
purpose entity, Kelly Corporate Finance (Pty) Ltd ("Kelly Corporate
Finance").
3.2 Kelly Corporate Finance has funded the purchase price paid to the Kelly
Group by issuing R120 million of Senior, 36 month Senior secured, non-
amortising rated debentures to Investec Bank. The balance of the purchase
price has been funded by Kelly Corporate Finance by means of a subordinated
loan raised from the Kelly Group in order to over-collateralise the Senior
Debentures. The Senior Debentures have been awarded a zaAA credit rating by
an independent credit rating agency, Global Credit Rating Co, reflecting the
strength and diversification of the Kelly Group`s debtors.
3.3 The Senior debentures bear interest at a fixed rate linked to the three
year swap curve, and the funding raised thereon now replaces the Company`s
existing debtors` securitisation funding transaction which was originally
implemented in 2001.
3.4 The recurring sale of trade debtors to Kelly Corporate Finance is without
specific recourse to the Kelly Group. The Kelly Group provides the required
first loss over-collateralisation and remains responsible for the ongoing
administration and collection of such trade debtors.
3.5 The Programme constitutes a single indivisible transaction, and has been
arranged for the Kelly Group by Mettle Specialised Finance.
Johannesburg
6 May 2010
Merchant bank and sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Date: 06/05/2010 14:00:01 Produced by the JSE SENS Department.
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