The bank’s holding company, African Bank Investments Limited ( Abil ), postponed issuing preference shares yesterday — which could have raised up to R250m — until it had clarified the effect of new dividend tax proposals announced in last week’s budget.
African Bank said it had issued a $50m, five-year, fixed-rate senior unsecured bond with a final redemption date of February 24 2017. The bond was issued at a credit spread of 693 basis points above the prevailing five-year dollar mid-swaps rate and was listed on the London Stock Exchange yesterday.
It was the second listed bond issued under African Bank’s $2bn Euro medium-term note programme, said the bank.
In an interview yesterday, the bank’s executive in charge of capital, funding and treasury, Gavin Jones, said the bond issue was three times oversubscribed by investors from Europe, Asia and the Middle East.
To avoid the failure of the bond issue, the bank timed it to coincide with the conclusion of a landmark deal to bail out Greece’s beleaguered government.
“This was a tactical capital management strategy and is part of our strategy to diversify our funding sources,” Mr Jones said.
“In total, we had 142 investors participating, half from the UK, about 20% from Switzerland, 15% from Asia and the balance from the Middle East,” he said.
Meanwhile, Abil said it had postponed a further tranche of preference shares to study the implications of an announcement by the government of the new dividend tax, which would be introduced at the rate of 15% instead of the 10% rate the market had generally anticipated.
Mr Jones said it was too early to say when these preference shares would be issued Business Day
