African Bank raises R358m on domestic bond market
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AFRICAN Bank Limited, a wholly-owned subsidiary of African Bank Holdings, has said it has raised successfully R358 million in the domestic bond market as it diversifies its funding base.
The three-year senior unsecured floating rate bond will pay quarterly coupons, and it is due to mature on September, 14, 2024.
Group Treasurer, Marlin Janeke said: “We were very pleased with the interest shown in this bond auction, which was effectively oversubscribed by 1.7 times. Due to the competitive bids submitted in the auction, we closed the auction at an issue price of 270 bps (basis points) above the 3-month Jibar rate, which was 5 bps lower than the bottom end of our pricing guidance of 275 – 290 bps.”
African Bank said that the funds raised, formed part of African Bank’s strategy to diversify its funding base, where wholesale and retail deposits, which exceeded R10 billion, were used to fund the operating activities of the Bank.
In August African Bank recorded a hike of 120 percent in new customers last month
Janeke said: “This is a great result and is further evidence that the debt capital market sentiment towards African Bank continues to improve. This improved market confidence in both the retail and wholesale funding sectors, strengthens the Bank’s position to continue funding itself at a reasonable funding cost.”