| Tue 27 Jul 2004, 13:42 | | Absa supports growth of corporate debt market |
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ABSA Group Limited - Absa supports growth of corporate debt market
ABSA GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1986/003934/06)
JSE CODE: ASA
Issuer code: AMAGB
ISIN CODE: ZAE000013389
(`Absa`)
27 July 2004
Absa supports growth of corporate debt market
Absa today announced the launch of their Global Corporate Series, the second in
their offering from Asset Backed Arbitraged Securities (ABACAS).
Steve Booysen, chief executive-designate of Absa says, `Our intention was to
create an innovative capital markets vehicle that met investor preferences. With
the introduction of the ABACAS Global Corporate Series, investors now have the
ability to optimise their exposures to different asset classes, a level of
flexibility that no other South African conduit currently offers.`
Absa launched South Africa`s first segregated series asset-backed commercial
paper programme, called ABACAS, in December 2002.
ABACAS was designed to be a versatile issuer of asset-backed commercial paper
programmes (ABCP) and as such, each series has its own unique features.
The Premier Series, the first series of commercial paper issued by ABACAS,
currently has close to R4 billion of F1+ rated commercial paper listed on the
Bond Exchange of South Africa.
The newly launched Global Corporate Series has a more focused mandate, investing
in high quality corporate exposures. On Monday, 26 July 2004 investors reacted
positively to the initial issue of R200 million, which was fully subscribed
following a successful road show by the ABACAS management team.
As with the Premier Series, the new series will also be rated F1+ by Fitch
Ratings. To cater for the nature of the underlying corporate assets, the Global
Corporate Series has unique structural features such as a series wide credit
enhancement facility and a guaranteed investment contract (GIC). The GIC enables
early repayment of the asset without affecting the outstanding commercial paper
(CP), thereby reducing prepayment risk to investors.
Commenting on the launch of the ABACAS Global Corporate Series, Tjaart Kruger,
head of Capital and Debt Markets at Absa, said, `Our joint venture with
Macquarie Bank allowed us to significantly improve our debt markets penetration
by capitalising on the experience, technology and resources of the Macquarie
Debt Markets team. This third generation technology is a result of this venture
and will enable us to leverage Absa`s leading position in the local bond and
money markets to provide a superior distribution and placement capacity for our
clients.`
Absa intends to use the Global Corporate Series to support the burgeoning
corporate bond market in South Africa. Larger companies with a suitable credit
rating are able to obtain significantly cheaper funding by listing debt on the
Bond Exchange of South Africa. In the last 12 months, corporates such as Sasol,
Anglogold and Barloworld, have issued more than R12 billion of longer-term bonds
to investors.
The Global Corporate Series repackages longer-term corporate bond exposure into
short-term instruments. This enables short-term money market investors to gain
exposure to these assets, thus broadening the domestic investor base and lending
support to the growing local capital markets.
Ends
Issued by: Errol Smith
Manager: Absa Media Services
Group Communication and Public Affairs
Tel: (011) 350-5768
errols@absa.co.za
For more information contact: Liezl Squier
Account Executive: Absa Corporate and Merchant Bank
Group Communication and Public Affairs
Tel: (011) 350-4291
Cell: 083 407 6898
liezls@absa.co.za
