Johannesburg - African Bank Investments Ltd (Abil) investors aren’t the only ones paying for the collapse of the South African unsecured lender.

Toyota South Africa delayed a R1.5 billion bond sale on Thursday “until further notice”, citing market turmoil following African Bank’s failure.

“A lot of our investors told us it would be unlikely that they would participate,” Kirthanya Pillay, assistant general manager for treasury and markets at Toyota Financial Services in Johannesburg, said by phone on Thursday.

“They are trying to deal with this crisis. The whole year we have been seeing a push-back from investors saying they want more yield. This will just make it a little more difficult.”

The failed bank’s bond default is another headwind for a market already under pressure from rising interest rates, slowing economic growth and a lack of liquidity.

A central bank-appointed caretaker said on Wednesday that African Bank would miss a debt repayment next month while its accounts were being investigated.

Abil said last week that it needed to raise at least R8.5bn to survive, causing the stock to lose 95 percent in three days and bond prices to fall by more than 50 percent.

Abil has not sold bonds since being downgraded to junk by Moody’s Investors Service in May.

Moody’s cut its rating again on Tuesday to Caa2 from Ba1.

Toyota South Africa, which has a Moody’s rating of Aa3, seven levels above junk, raises money through bonds to finance vehicle loans.

The company had about R4.5bn of debt and aimed to tap the market twice a year, Pillay said.

“Given the turmoil in the markets following the African Bank situation, we decided to postpone the issue for now,” she explained.

Yields on Toyota’s R500 million of notes due July 2016 were little changed on Friday at 7.82 percent after dropping nine basis points on Thursday. – Robert Brand for Bloomberg