Two of SA`s big four banks, Absa and Standard Bank, have facilitated an R8 billion loan for Vodacom`s 50% owner, Vodafone.
The loan, reported to be the biggest rand syndicated loan in the South African market so far, saw the placement of the five-year term loan for Vodafone Holdings SA. The placement, which was oversubscribed, will be used to partly refinance shareholder loans, said a statement.
Vodafone increased its stake in Vodacom, 50%-owned by fixed-line operator Telkom, when it bought out Venfin`s 15% stake. Vodacom is now jointly owned by the two companies.
"The extent to which Vodafone`s first entry into the local debt market was significantly oversubscribed speaks to both the depth and sophistication of the South African term loan market, as well as the structure of the transaction," says Ben Kruger, CEO of Standard Bank`s corporate and investment bank.
The transaction was underwritten by Absa and Standard as joint book runners and mandated lead arrangers. Standard was appointed as global coordinator, while Absa was appointed as facility agent. Absa was able to leverage off its parent company`s global relationship with Vodafone.
"As joint book runners, Absa Capital and Standard Bank believe that the syndicated loans market in SA will grow significantly over the next few years. This is due to factors such as SA`s large infrastructural spend, increased and larger inward and outward investments, as well as the need for better risk diversification and capital optimisation amongst financial institutions," says John Vitalo, Absa Capital CEO.
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