Transnet SOC has successfully issued a $1.0-billion five-year bond at a coupon of 8.25%, in its first international bond issuance in more than 10 years.
Transnet spokesperson Ayanda Shezi said in a statement that the bond issuance was 2.9 times oversubscribed.
“This demonstrates investor confidence in the company, their appreciation of its role in the economy, as well as expectations that implemented strategies will improve operational performance and consequently ensure positive financial outcomes,” Shezi added.
The bond is listed on the International Securities Market of the London Stock Exchange under Transnet’s Global Medium-Term Note Programme. Transnet’s lead arrangers for the bond issue were Absa, JP Morgan, Standard Bank SA and their respective partners, Tysis Advisory, Capital Link Partners and Afris Capital.
“The proceeds of the bond will go towards repayment of debt, capital investment, as well as operational requirements as the company rolls out its strategy,” Shezi said.
Based on the successful bond issuance, S&P Ratings confirmed the credit rating of the issuance at BB- with a negative outlook, as per its Bulletin report released on February 1. This rating is in line with the current ratings of Transnet.
“S&P Ratings has also indicated that this issuance improves the liquidity of the company and reduces its refinancing risk,” Shezi said.
