Absa Bank has secured a US$500mn term loan from a syndicate of 19 banks, the proceeds of which will be used for general corporate purposes, including trade finance.
“This is the first syndicated loan Absa Bank has concluded in more than a decade and we are pleased with the result,” says Jason Quinn, financial director of Absa Group, of which the bank is a wholly-owned subsidiary. “The need for this syndicated loan following our US$400mn tier II bond issuance last year is to fund the growth in our US dollar lending both in South Africa and our regional operations, in support of our group strategy.”
The term loan was initially launched at US$300mn on May 29 to select financial institutions and received significant commitments. Absa subsequently decided to upsize the transaction to US$500mn. The launch to general syndication received a similarly strong response, achieving a 192% oversubscription versus the original launch amount.
“This significant oversubscription necessitated the scaling back of total commitments, even after upsizing the facility to US$500mn,” says a release issued by the lead banks. “The positive market response is a reflection of Absa’s strong appeal to international investors, as well as the borrower’s robust credit profile.”
Co-ordinators, bookrunners and mandated lead arrangers (MLAs) on the deal were Bank of America Merrill Lynch and Standard Chartered.
Bookrunners and MLAs included BNP Paribas, Citi, Commerzbank, First Abu Dhabi Bank, HSBC, ICBC (London branch), Mizuho, MUFG, Rakbank, Société Générale, State Bank of India (Johannesburg and London branches), SMBC Europe and Wells Fargo (London branch).
Lead arrangers were Bank of Taiwan (South Africa branch), Erste Group, ING and JP Morgan Securities.
The loan has an initial tenor of two years, with the availability of a one-year extension option. It pays a margin of 1.05% per annum.