Johannesburg - South African diversified holding company Imperial Holdings on Tuesday said it has issued a R1.5 billion 7-year corporate bond, due for settlement on Thursday 29 March by wholly owned subsidiary, Imperial Group.
The issue, which has been arranged jointly by Deutsche Bank AG and Standard Bank of South Africa, has been priced at 125 basis points over the SA Government's R201 issue.
The proceeds of the issue will be used to repay short term debt and to provide liquidity for the R1.2 billion redemption of the IPL2 bond in February 2008, Imperial said ion a statement on Tuesday.
The issue, to be named IPL4, will be governed by Imperial's R5 billion Domestic Medium Term Note Programme and is guaranteed by Imperial Holdings. Imperial Group holds a Baa1 international scale credit rating from Moody's.
The Imperial businesses which encompass substantial asset owning, leasing, logistics and car rental activities continue to develop through a group wide focus on entrepreneurship. The bond issue supports the Group's funding strategy across all these activities enabling Imperial to leverage its financial strength and provide liquidity at competitive funding rates, it said.
Hubert Brody, Director responsible for Group Treasury commented: "We are delighted by the broad based support we received for this issue. It reflects the strength and stability of our long term funding strategy and provides the foundation for the long term financial needs of our businesses."
Imperial has been a pioneer in the development of the corporate debt market in South Africa with its first short term commercial paper issue being done in 2000. This was followed by the issue of an R800 million five year bond in 2001, a further R800 million six year bond in 2002 (extended to R1.2 billion in a tap issue in 2005), and a R1 billion seven year bond in 2003.
In addition, the group issued a €300 million 7 year Eurobond in 2006. Another group company, Imperial Capital Ltd, issued a R1 billion 5 year bond in 2005 and has also established a commercial paper programme. - I-Net Bridge