State-owned freight and logistics company Transnet SOC has successfully re-entered the international syndicated loan market by signing a five-year Senior Unsecured term loan facility of up to $1.5 billion (about R24.4bn), led by Deutsche Bank AG, the largest funding transaction by the utility in seven years.
The facility will be used by Transnet to finance its capital expansion programme, and refinance existing debt in line with Transnet’s corporate funding plan for 2022/23, a statement said yesterday.
The first drawdown of $685 million was scheduled for this month. The facility was also structured to be repaid in eight equal semi-annual instalments, after a 12-month grace period.
There is an Accordion feature in the transaction for up to $1.5bn, until December 2022. Given the Accordion feature, Transnet will have about $800m available for drawdown up until December 31, 2022, subject to market conditions and investor appetite.
The transaction saw participation from a number of investors and DFIs (development finance institutions), demonstrating confidence in Transnet and expanding its investor base.
The institutions included Deutsche Bank AG as global co-ordinator, Africa Finance Corporation, African Export-Import Bank and Ahli United Bank as lead manager.
Transnet’s Group CFO Nonkululeko Dlamini said the transaction was “a significant milestone to stabilise Transnet’s liquidity position in support of our financial sustainability. It has been the single largest funding transaction which Transnet has been able to secure in the last seven years, with the benefit of diversifying our investor base in the process.”
BUSINESS REPORT