Transnet SOC Ltd has completed a successful issuance of a global ZAR5 billion bond registered with the London Stock Exchange at a yield of 9,5% - the first African local currency issuance in international capital markets. This follows successful road shows by Transnet in the UK and North America.
For the country, the issuance confirms South Africa as one of the leading investment destinations among emerging markets and provides a much needed boost for investment inflows. It signals increasing investor confidence in South Africa’s economy.
The landmark issuance confirms Transnet’s improved credit standing and investor confidence in the company’s ability to execute programmes under our audacious Market Demand Strategy. This is in line with our board-approved funding strategy of diversifying funding sources while lowering our average cost of debt.
This bond, which matures in 2021, is the third successful issuance under Transnet’s Global Medium Term Note Programme (GMTN) to meet Transnet’s funding requirement. Crucially, all Transnet’s bonds under the GMTN programme are issued on the strength of Transnet’s balance sheet with no government guarantees.
Transnet will use the proceeds to fund part of its R307,5 billion seven-year infrastructure investment programme, which prioritises expanding South Africa’s rail, port and pipeline infrastructure.
Significantly, as a result of this transaction and other facilities, Transnet has now met the R15,6 billion funding requirement for the current financial year.
Source Press Release.
