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ABSA OVERSUBSCRIBED ON TAP
ABSA GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1986/003934/06)
ISIN CODE: ZAE000013389
JSE CODE: ASA
ABSA OVERSUBSCRIBED ON TAP
Absa Bank Limited confirmed its support of the domestic capital markets by
launching a sizeable tap of its BESA listed AB02 bond.
Absa Corporate and Merchant Bank was sole lead manager for the issue.
The issue is expected to boost underlying liquidity in the stock, already one of
the more liquid corporate bonds listed on the Bond Exchange. A total of R1,5
billion was placed with a broad range of institutional investors at a spread of
165bp to the R194, giving an all in yield of 13,57%.
This represents a 5bp spread improvement on the original listing of the AB02 in
March this year, and an absolute reduction of 81bp in the cost of tier II
capital as compared to the original issue.
Absa was initially intending to tap approximately R1 billion, but healthy bid
volumes saw the tap amount increased to R1.5 billion. The bookbuild was closed
early and despite the increase in volume the issue was still well overbid,
resulting in a scaled back allocation for investors.
The positive sentiment towards Absa is a reflection of a recent endorsement by
CA-Ratings of the credit outlook of the bank with an improvement from a "stable"
to a "positive" outlook.
The upgrade was also an endorsement of Absa`s strength in its core capabilities,
its long-term capacity as well as its short-term capacity to meet debt
obligations.
Nallie Bosman, CEO of the Absa Group, says "This issue of the bond successfully
positions Absa to continue with its growth strategy, and allows for acquisitions
such as the recently announced PSG transaction.
The way in which the market has reacted to the placement and management of the
issue also signals that both the Treasury and Capital and Debt Markets teams of
Absa Corporate and Merchant Bank have successfully positioned themselves in the
marketplace. We believe its quite an achievement to have managed an overall
reduction in the cost of our capital while interest rates have been rising."
The bond will be settled on 31 October 2002. The bond has a stated maturity date
of 22 March 2014, but Absa has the option to call the bond on 22 March 2009.
Details of the bond issue are
- Settlement Date: 31 October 2002
- Listing: Bond Exchange of South Africa (AB02)
- Nominal: ZAR1.5 billion
- Maturity Date: 22 March 2014
- Issuer`s call: 22 March 2009 or any interest payment date thereafter
- Coupon: Fixed at 14.25% until 22 March 2009, thereafter
floating at JIBAR plus 4.645% until maturity
- Books close dates: Fixed period, 12 March and 12 September.
Floating period, 12 March, 12 June, 12 September, 12 July
- Re-offer yield: 13.57%
- Re-offer price: 104.34208
- Status: Subordinated, qualifying Tier II capital issue
- Law : South African
- Denominations : R1 million
- Lead Manager: Absa Corporate & Merchant Bank
Ends.
LEAD SPONSOR
MERRILL LYNCH SOUTH AFRICA (PTY) LTD
CO-SPONSOR
ABSA CORPORATE & MERCHANT BANK
Issued by Julie Macliam
Absa Group Media Relations
Tel: (011) 350 4588
Cell: 082 449 7705
E-mail: juliemc@absa.co.za
For more information contact Liezl Squier
Absa Corporate and Merchant Bank
Tel: (011) 350 4291
Cell: 083 407 6898
E-mail: liezls@absa.co.za
28 October 2002
Date: 28/10/2002 03:49:00 PM Produced by the JSE SENS Department
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