Investec second of SA's big five' to issue perpetual preference shares
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Financial Services Editor
INVESTEC Bank has become the second of SA's big five banks, after Nedcor, to issue perpetual preference shares to boost its primary capital and take advantage of retail investor demand for these instruments.
Investec is to issue R500m of these prefs on the market but can issue up to R1bn. They will pay a semi-annual dividend of 75% of Investec Bank's prime overdraft rate, currently at 15,5%, making them attractive to retail investors
Investec's Ursula Munitich said the bank did not immediately need capital but had taken advantage of the opportunity to boost its primary capital ahead of the introduction of new regulations later this year.
Currently the ratio of primary to secondary capital can be 50:50 but banking regulators plan to change this to 75:25. Like equity, the perpetual prefs count as primary capital for bank regulatory purposes.
Jul 17 2003 07:48:22:000AM Hilary Joffe Business Day 1st Edition
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