Bloomberg News

African Bank Sells $300 Million of Bonds in 1st Dollar Sale

June 15, 2011

(Updates with pricing in second paragraph.)

June 15 (Bloomberg) -- African Bank Investments Ltd., a South African owner of a lender and a furniture retailer, said it sold $300 million of five-year notes in its first issue of dollar-denominated debt.

The bonds, which mature on June 15, 2016, were priced to yield 425 basis points above the five-year dollar mid-swap rate and were issued as part of a $1 billion program, the Johannesburg-based company said in a stock-exchange statement. The debt is listed on the London Stock Exchange.

The South African Reserve Bank raised African Bank’s capital reserve requirement to 24.5 percent from April 1, the company said on May 23. The lender would maintain “a steady flow of available funding and a further reduction in the cost of funding” to meet capital requirements, the company said.

South African companies have sold $5.4 billion of debt this year, the most on record for the first half, to take advantage of borrowing costs that are the lowest in three decades, according to data compiled by Bloomberg. On March 8, African Bank sold 1 billion rand ($147 million) of four-year bonds at a yield of 240 basis points above the three-month Johannesburg interbank acceptance rate.

African Bank said it bought derivative contracts to fix the rand amount of coupon and redemption payments to its dollar-bond investors.

--Editors: Ana Monteiro, Linda Shen

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

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


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