Fitch rates Liberty’s debt issue

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Fitch Ratings has assigned SA-based Liberty Group’s (BT) National IFS issue of subordinated debt securities a rating of 'A+(zaf)'‚ in line with Fitch's standard notching practices.

The R1bn issue is part of the group's active capital management and takes into account the refinancing of Liberty Group’s current outstanding bond.

This involves the redemption of its outstanding R2bn subordinated bond at 8.93% coupon‚ callable on 12 September 2012 with a maturity date of 12 September 2017.

The issue leads to a temporary increase in the group's financial leverage from 14% to 19% during the overlap period of August to September 2012.

During this period‚ Liberty has two subordinated bonds‚ an existing bond of R2bn and a new bond of R1bn. Thereafter the financial leverage ratios are expected to drop to 8%‚ which Fitch considers low for Liberty’s rating.

The issue is not callable and has its final maturity date on the 13 August 2017. The securities pay a fixed annual coupon of 7.67% semi-annually for 5 years. The notes have no interest deferral features or other loss absorption features‚ Fitch said on Friday. - I-Net Bridge

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