Related News

The South African Reserve Bank is pleased to announce the signing of a US$1bn syndicated term loan, which matures in 2006.

Lending banks could participate at one of three levels: the mandated lead arranger; co-arranger; or lead manager level. To participate at the top level of mandated lead arranger, a bank had to provide an initial commitment of US$100mn to the transaction. At the co-arranger level, the required commitment was US$50mn, while at the lead manager level, US$25mn had to be committed. When the general syndication was closed, banks had been prepared to commit US$2.050bn to the syndicated loan. That is, banks were willing to commit more than double the amount that the Reserve Bank had indicated it would borrow. This substantial oversubscription bears testimony to the success of the transaction and, more importantly, reflects the improving credit story of the South African economy. The strength of SARB’s international banking relationships have once again allowed a smooth execution of the transaction in a marketplace which generally was characterised by uncertainty and volatility. The good standing of the South African Reserve Bank in the international financial markets is illustrated by the quality of banks which have participated, as well as the geographic spread of the source of funds.

The syndicated loan may be drawn down in US dollars and/or euros at a margin of 67.5bp above Libor/Euribor. This may be compared to the margin of 70bp which was negotiated for the three-year leg of the 2002 US$1bn syndicated loan.

As a result of the substantial oversubscription, the final allocations for the lenders were as follows:

Mandated lead arranger: US$47.5mn

Co-arranger: US$26mn

Lead manager: US$14.5mn


Mandated lead arrangers

Bank of Tokyo-Mitsubishi, Ltd (joint bookrunner)

Barclays Capital (joint bookrunner)

BayernLB (facility agent)

BNP Paribas


Commerzbank Securities

Cr édit Agricole Indosuez (joint bookrunner)

Dresdner Kleinwort Wasserstein

HSBC Bank Plc (documentation bank)

ING (signing & publicity)

JP Morgan

Mizuho Corporate Bank, Ltd.

Standard Bank London Limited

Standard Chartered Bank

Sumitomo Mitsui Banking Corporation Europe Limited

WestLB (joint bookrunner)



Bank of China

China Construction Bank (CCB)

Goldman Sachs International

KBC Bank NV Dublin Branch

LRP Landesbank Rheinland-Pfalz

HSH Nordbank AG

Raiffeisen Zentralbank Österreich Aktiengesellschaft


Lead managers

BMO Financial Group

Bank of New York

Erste Bank

NM Rothschild & Sons Limited

US$500mn of the proceeds of the syndicated loan will be used to finance the repayment of the maturing US$500mn gold denominated term loan facility. The balance of the proceeds will be added to the reserves of the South African Reserve Bank.