Bloomberg News

FirstRand Bank of South Africa Plans to Sell Dollar Bonds

June 01, 2011

(Updates with price guidance in fifth paragraph.)

June 1 (Bloomberg) -- FirstRand Bank Ltd., a unit of South Africa’s second-biggest financial services company, is planning to sell $300 million of bonds, a banker with knowledge of the deal said.

The bond should be priced tomorrow, said the banker, who didn’t want to be named as the details haven’t been made public.

“We are busy with the book-building and we will issue in the next two days,” Andries du Toit, the Johannesburg-based lender’s head of capital management, said by phone, without confirming the size or giving price guidance for the issue. “The money will be used for general funding purposes.”

The sale will be managed by JPMorgan Chase & Co., Mitsubishi UFJ Securities, Standard Chartered Plc and UBS AG and the bond may be rated A2, the fifth-lowest investment grade, by Moody’s Investors Service, a banker with knowledge of the deal said.

The bond may yield between 262.5 and 275 basis points over the benchmark mid-swap rate, the banker with knowledge of the deal said.

FirstRand on April 21 last year delayed plans to sell at least 500 million euros ($720 million) of five-year bonds in euro, pounds, rand or yen after probes into Goldman Sachs Group Inc. made market pricing volatile. It said at the time it wanted to raise money to expand its operations in Africa.

FirstRand planned to meet bond investors starting May 9 in London, Zurich and Geneva, Du Toit said on May 4. The size and currency of the issue will depend on investor demand, he said.

The bank leads bond sales by lenders in South Africa this year, raising the equivalent of $633.7 million in 10 issues, compared with $619.4 million by second-placed Absa Group Ltd., a unit of Barclays Plc, according to data compiled by Bloomberg.

--With assistance from Esteban Duarte in Madrid. Editors: Ana Monteiro, Alexander Nicholson

To contact the reporters on this story: Jason Webb in London at jwebb25@bloomberg.net; Robert Brand in Cape Town Nef at rbrand9@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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