| Absa Capital, Barclays Bank Botswana arrange debt issuance |
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| Written by Staff Reporters | |
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Absa Capital, the investment banking division of Absa Bank Ltd, in partnership with Barclays Bank Botswana, this week announced the single largest parastatal debt issuance totalling BWP400 million to that country’s Water Utilities Corporation (WUC).
This was the second such debt issuance arranged by Absa
Capital and Barclays Bank in Botswana this year. The note was due to be
listed on the Botswana Stock Exchange at the time of going to press.
Besides the size of the issuance, this week’s announcement is also significant given the recent redemptions and lull in non-bank bond issuance over the past two years. Historically, the WUC has depended on loans from the Public Debt Service Fund (now Debt Participation Capital Fund), banks, and regional and international development finance institutions for funding its capital expenditure. In order to diversify its funding base and reduce the cost of borrowing, the water utility mandated Absa Capital and Barclays Bank Botswana to co-lead the bond issue. The bonds were marketed to the domestic investment community through a comprehensive road show. The two organisations met with overwhelming demand in both the 10-year and 18-year areas, despite the competing supply just days prior to the WUC coming to market. The bonds are issued as fixed-rate instruments and pay a semi-annual coupon of 10.65% and 10.60% per annum for the WUC001 and WUC002, respectively. “Bond pricing and structure were key to the successful launch of the WUC bonds,” said Jacques Els, Head of Bonds, Convertibles and Hybrids at Absa Capital. |
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