Highly commended African deal of the year 2013: Transnet
|Transnet’s R5 billion Eurobond|
|Lead managers||Deutsche Bank|
|return to the Deals of the Year 2013 index|
In a landmark deal on November 6 2013, Transnet, a state-owned freight-logistics company, became the first South African company to issue a rand-denominated bond on the international capital markets.
By setting the benchmark, Transnet hope to lead the way for other South African corporates to do the same.
The R5 billion ($442 million) issue over seven-and-a-half years was listed on the London Stock Exchange with a yield of 9.5%, pricing marginally wider than the initial yield indication of 9.125% to 9.25%.
"Between the time we had initially discussed the idea with Transnet in April 2013 to the time that the bond was issued in November, the economic environment for emerging market bonds had changed," says Neil Shuttleworth, head of EEMEA debt capital markets syndicate at Deutsche Bank, the sole bookrunner on the deal. "News that Fed tapering would come into action in the coming months, problems in the mining sector in South Africa and a weaker rand forced the decision to widen the price.