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Market oversubscribes to Transnet’s US$1bn bond issue

Home Business Management Finance & Investment Market oversubscribes to Transnet’s US$1bn bond issue

ON January 30, 2023, Transnet SOC Ltd successfully issued a US$1.0 billion five-year bond at a coupon of 8.25%, in its first international bond issuance in over 10 years, Transnet Group spokesperson Ayanda Shezi said in a media statement issued on Friday.

“This 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. This bond is listed on the International Securities Market of the London Stock Exchange under Transnet’s Global Medium Term Note Programme,” said Shezi.

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 the repayment of debt, capital investment as well as operational requirements as the company rolls out its strategy.

Based on the successful bond issuance S&P Ratings has confirmed the credit rating of this issuance at BB- with a negative outlook, as per the agency’s bulletin report released on February 1,  2023. 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.

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