| Wed 6 Feb 2002, 0:00 | | Imperial's Second Bond Gets Good Response |
|
Imperial Holdings Limited
Johannesburg - Tuesday February 5, 2002
The second issue of Imperial Holdings' R2,5-billion Domestic Medium Term
Note (DMTN) programme has been well supported and has been issued at 104
basis points above the benchmark R194 Government bond.
The R800-million bond means that Imperial has raised R1,6-billion as part of
its DMTN programme. The details of the new bond were released today. The
coupon on the bond is 12,75%, giving a yield to maturity of 12,87%. The
maturity of the bond is February 28, 2008 and the settlement date is Friday
this week. Imperial settled on raising R800-million at a spread of 11 basis
points above the first bond IPL1.
Bids with a value of some R2,2-billion were received, according to Imperial
Bank, reflecting the market's strong appetite for Imperial paper. Imperial
recently received an AA+ long-term credit rating from CA-Ratings.
Investec Bank and Merrill Lynch South Africa were joint lead mangers and
bookrunners of the bond, which will be listed on the Bond Exchange of South
Africa (BESA) as IPL2. Imperial was advised by Imperial Bank.
Commenting on the response of the market to the issue, financial director
Hafiz Mahomed said that Imperial was delighted with the response of
investors. "With the uncertainty that we have seen in the market recently,
we believe that the bond's pricing is competitive. Although the all-in rate
of 12,87% may seem high, Imperial is more sensitive to the credit spread
than the base rate, having swapped the issue into a floating interest rate
basis at a far lower cost of funds."
He pointed out that the spread of 104 points compares with the current 93
point spread for Imperial's existing shorter dated bond, the March 2006
IPL1. The other corporate benchmark, Standard Bank's October 2008 SBK3
bond, is currently trading at 111 points above the R194.
"We were also encouraged by the enthusiastic response we had to our roadshow
in the light of the fact that other issuers decided not to proceed with
their issues in recent times and we hope that the success of our issue will
settle the corporate bond market ."
Imperial is committed to developing a capital market presence and this is
the company's third issue in two years. The company first established a R1,1-
billion short-term commercial paper programme, then in July last year
established its DMTN programme. There are now two successful bonds issued
under this programme.
Mr Mahomed said: "We have now raised R2,7-billion directly through the debt
capital markets, and remain committed to this market as a cornerstone of our
debt funding strategy."
The Imperial group has R16-billion in assets and rental and leasing assets
total about R4-billion alone. In the year to June 2001, Imperial earned an
income of R1,2-billion after tax and generated R2,7-billion of earnings
before interest, depreciation and amortisation so the group is comfortable
with higher, well-priced debt levels.
"It is our objective to maintain a better spread between short and long-term
debt. With these bonds and our commercial paper programme, corporate debt
now represents over 50% of our total interest-bearing borrowings," Mr
Mahomed added.
Ends
Please note:
Imperial Holdings activities include a wide range of services relating to
motoring, car rental and tourism, transport, trucking, aviation leasing,
logistics and fleet management outsourcing, forklifts, and a comprehensive
related financial services arm supplying banking, short-term insurance and
life assurance. While these services combine to facilitate maximum synergy
between business entities, a decentralised management structure engenders
industry best practice. Management is empowered to develop each business
with entrepreneurship into unique business units within the strength and
support structures of the Imperial group.
Imperial employs 24 000 people at locations in 26 countries and had total
assets of R16,4-billion at June 25, 2001 and its revenues totalled R21,9-
billion.
Visit our websites- www.imperial .co.za and www.imperialtoday.co.za
ISSUED BY : PENELOPE GRACIE INVESTOR RELATIONS
ON BEHALF OF : IMPERIAL HOLDINGS LIMITED
FURTHER INFORMATION : PENELOPE GRACIE
CONTACT : OFFICE +27 (11) 447-3301
MOBILE 082-55-77-444
